Many experts and social commentators have observed that some Americans-mostly those without higher education or specialized skills-become trapped in a cycle of low-wage jobs that makes it hard for them to gain ground and advance beyond the ranks of the working poor.
While others dispute those claims, The New York Times reported Thursday one area where it's the truth.
Fast-food chains Arby's, Carl's Jr., McDonald's, Jimmy John's, Auntie Anne's, Buffalo Wild Wings and Cinnabon have inked an agreement with the state of Washington to stop the longstanding practice of including and enforcing "no-poach" provisions in their contracts with franchisees.
The "no-poach" rule prohibits workers from moving from one store in the chain to another, even if a better opportunity opens. For instance, a worker at a fast-food burger chain may not get enough hours to pay the bills. Say a nearby store in the same chain can offer more hours and thus more money. The "no-poach" agreements could prevent the worker from making a move and improving his or her situation.
One of the big problems with the "no-poach" agreements, according to the New York Times, is that they are not part of employment paperwork, where workers could see them, but are included in franchise contracts not available to the workers. So they may never know their opportunities are being limited.
The "no-poach" provisions are within each chain. Workers are free to leave one chain for a different restaurant.
It turns out these rules are pretty common in low-wage situations, especially in the national restaurant business. A study last year by Princeton University said about 70,000 restaurants in the U.S. have them.
At least 11 others states are looking into the practice, according to the Times. The seven chains that settled with Washington say they will stop enforcing the provision nationwide and will not include it in any future franchise agreements.
We expect more chains to follow suit.
While the "no-poach" clause is likely designed to reduce employee turnover, it is unfair to workers-especially if they aren't aware that it even exists. The chains still using the rule would be wise to voluntarily re-examine the practice before they are forced to do so-maybe in court.