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US Court Revives McDonald's Antitrust Case

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US Court Revives McDonald's Antitrust Case

  • On Friday, the 7th US Circuit Court of Appeals in Chicago revived the proposed nationwide class action suit accusing McDonald's of violating federal antitrust law. Reuters (LR: 3 CP: 5)
  • The lawsuit alleges McDonald's required franchisees not to hire each other's employees — a policy previously ruled valid by a district judge, who said it protected franchisees' investments in trained workers. Bloomberglaw
  • Judge Frank Easterbrook ruled that the lower court must analyze the so-called "no-poaching" agreements, including whether they need to cover the entire country or last so long. The Messenger
  • Former McDonald's employees Leinani Deslandes and Stephanie Turner — the plaintiffs in the case — claim the agreements were anti-competitive and prevented them from taking higher-paying jobs at other outlets. Onlabor
  • In court filings, McDonald's has said it dropped the no-poach clause from its franchisees' agreements in 2017. US News & World Report
  • The Biden administration and Democratic attorneys general of 20 states and Washington, DC, reportedly support the plaintiffs, agreeing that McDonald's agreements illegally suppressed workers' wages. Reuters (LR: 3 CP: 5)

Narrative A:

  • No-poach agreements are against free market principles and undermine the rights of workers, as they hinder employees from seeking promotions and earning a better living. Such practices, which employees have often been unaware existed, are unlawful and harm competition in the labor market by reducing employee mobility and suppressing wages.
    Reuters (LR: 3 CP: 5)

Narrative B:

  • No-poach or no-hire agreements only bar employees at franchise-owned restaurants from being hired by a separate franchise within the same chain. Under such agreements, workers are still free to seek more competitive roles with other employers if they wish — these practices shouldn't be subject to antitrust scrutiny.
    Recruitee

Nerd narrative:

  • There's a 50% chance that the first fully automated McDonald's will open in the US by April 2030, according to the Metaculus prediction community.
    Metaculus (LR: 3 CP: 3)
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