In 2009, Leinani Deslandes got an entry-level job at a McDonald’s franchise in Apopka, Florida, making $7 an hour. She advanced quickly and was promoted to department manager of guest services in 2011, a position that paid her $12 an hour. Not wanting to stop there, Deslandes began the coursework that would make her eligible to become a general manager. The final step was attending a weeklong training at the company’s “Hamburger University” in Illinois. But when her supervisors found out she was pregnant, they canceled her trip, making it impossible for Deslandes to fulfill that last requirement.
Frustrated, Deslandes decided to look for another management job. Although she had gained a lot of experience and training, it was mainly applicable to working at McDonald’s, so she kept her search within the company. She soon found a manager opening at another location, run by a different franchisee, that started at $13.75 an hour and would jump to $14.75 after a 90-day probationary period. That kind of pay meant a 23 percent raise over her current job.
The other franchise was interested in hiring her, but there was a catch. McDonald’s franchisees are required to sign a contract with corporate headquarters that includes a “no hire” and “no solicitation” clause stipulating that they can’t “employ or seek to employ any person” who is either currently employed by another McDonald’s franchise or has been in the past six months.
In order to hire Deslandes, the other franchise had to get her current manager to release her from this clause. But the supervisors at her current job refused the request, telling her that she was “too valuable.” So she had to stay where she was, at her lower pay.
Deslandes is now suing McDonald’s headquarters over its policy, claiming that she suffered reduced wages and the “loss of professional growth opportunities” due to the nonpoaching agreement. “As part of McDonald’s system to maintain its significant competitive advantage…McDonald’s has colluded to suppress the wages of the restaurant-based employees who work not only at McDonald’s in Orange County, Florida, but also throughout the United States,” her lawsuit alleges. “The collusion of employers to refrain from hiring each other’s employees restricts employee mobility. This raises employers’ power in the market at the expense of employees and diminishes employee bargaining power.” This practice, the suit argues, hurts employees by “lowering salaries and benefits they otherwise would have commanded in an open marketplace.” McDonald’s did not respond to a request for comment.
Noncompete and nonpoaching agreements like the ones used by McDonald’s are meant, in theory, to protect company information—so an engineer who has access to intellectual property developed by, say, Microsoft, may be obligated to wait six months, during which that information will become irrelevant, before taking a job at Apple. But such agreements are now becoming rampant throughout the economy and are frequently applied to workers holding low-wage jobs—jobs without any access to company secrets in the first place.