First AG lawsuit against company no-poach clause ends with $150K payment

Jersey Mike’s had the contract provisions in place until April 2018.

Jersey Mike’s, a company with King County franchises, has agreed to pay $150,000 to resolve a lawsuit over its use of no-poach provisions in contracts.

Washington Attorney General Bob Ferguson made the announcement on Aug. 23 and the agreement to settle the claims against all defendants was set to be approved at a hearing on Sept. 3, after the Reporter’s deadline, according to court documents.

There are 40 Jersey Mike franchises in Washington, and one planned for Edmonds. The restaurants are all independently owned.

As part of the agreement, the company will not add anti-poaching provisions to new contracts and remove them from their agreements around the country. These contracts prohibit companies from hiring or seeking to employ workers at other franchises, eliminating competition.

It’s these no-poach provisions that harm workers, Ferguson asserted in his reasoning. And restricting this competition in the labor market violates the state Consumer Protection Act.

In January 2018, Ferguson’s antitrust division launched an investigation into no-poach clauses and found that Jersey Mike’s used no-poach language in contracts at its Washington locations and about 1,343 locations nationwide.

Last year, the attorney general offered Jersey Mike’s — along with other businesses — the opportunity to sign a legally binding agreement to stop using no-poach provisions. In exchange, they would face no monetary penalty. Sixty-six corporate chains took Ferguson up on his offer. Jersey Mike’s did not.

Ferguson, in response, filed a lawsuit against the company. It was the first lawsuit any state attorney general brought against a corporation over use of no-poach clauses in franchise agreements. And although the company began to remove the clauses shortly after the lawsuit was announced, Ferguson could still seek penalties for prior unlawful conduct.

The $150,000 in funds paid by Jersey Mike’s will be used for the recovery costs of attorneys’ fees and for future enforcement and monitoring of the Consumer Protection Act.

Jersey Mike’s did not respond to requests for comment by the time of publication.


In consideration of how we voice our opinions in the modern world, we’ve closed comments on our websites. We value the opinions of our readers and we encourage you to keep the conversation going.

Please feel free to share your story tips by emailing editor@redmond-reporter.com.

To share your opinion for publication, submit a letter through our website https://www.redmond-reporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) We reserve the right to edit letters, but if you keep yours to 300 words or less, we won’t ask you to shorten it.

More in Business

Big Island Poke in Renton (courtesy of The Intentionalist Facebook page)
Small-business advocacy group wants you to try minority-owned businesses and put it on their tab

The Intentionalist is opening up $400 tabs for folks to use this weekend at select businesses.

Eastside King County restaurant owners discuss challenges with U.S. Rep Suzan DelBene at Pomegranate Bistro in Redmond. (Photo credit: Cameron Sheppard/Sound Publishing)
Restaurant owners discuss labor difficulties with U.S Rep. Suzan DelBene

Experienced service and kitchen staff are reportedly hard to hire as food service reopens.

Dave and Buster's restaurant and entertainment venue looks to hire 130 people to staff its Bellevue venue, set to open in August. Photo courtesy Dave and Busters.
Dave and Buster’s hiring 130 for August opening in Bellevue

Dave and Buster’s restaurant and entertainment venue opens in downtown Bellevue on… Continue reading

Images of dishes from Issaquah’s Umi Cafe posted on the SMORS page. (Photo courtesy of Kristen Ho)
Facebook page promotes minority-owned restaurants across Puget Sound region

Miya Nazzaro used to be a member of Facebook pages that were… Continue reading

The Moe Vegan food truck serves meals at the city of Kent’s annual Community Thanksgiving Dinner on Nov. 21, 2020. Sound Publishing file photo
King County fire marshals offer regulatory relief to food trucks

39 fire authorities have reportedly agreed to standardize fire codes and inspections.

Cash Cards Unlimited partners, left: Nick Nugwynne, right: Cassius Marsh (photo credit: Cash Cards Unlimited)
Former Seahawks player Cassius Marsh cashes in on trading cards

Marsh and his friend open physical and online trading card store as collectibles boom amid pandemic.

Teaser
First large-scale, human composting facility in the world will open in Auburn

“It’s what nature meant us to do. We just do it faster.”

Mayuri International Foods partners, left: Mahidhar Reddy center: Neeraj Poudyal right: Ramesh Bachala (photo credit: Cameron Sheppard)
Mayuri International Foods grocery store to open in Redmond Town Center

The store will include a unique produce selection and an extensive menu of prepared hot foods.

“You stay, we pay,” promotion (photo credit: Bullseye Creative)
The city of Redmond wants to pay you to stay there

New tourism promotion will give $100 gift certificates for local businesses to guests at 8 hotels.

Whole Foods grocery store entrance (Shutterstock)
King County considers grocery store worker hazard pay for those in unincorporated areas

The King County Metropolitan Council will vote during its next meeting on… Continue reading

Screenshot
WA Democrats consider new tax on billionaires

Plan could raise $5 billion from fewer than 100 taxpayers. Detractors fear it could drive Washington’s wealthiest out of state.

Last summer, people took advantage of the outdoor dining along First Avenue between Gowe and Titus streets in downtown Kent. In Phase 2 of the governor’s reopening plan, which was announced Jan. 28, restaurants can reopen at a maximum 25% capacity and a limit of six people per table. Photo courtesy of Kent Downtown Partnership
Restaurant reprieve: State to relax some indoor restrictions

On Monday, area restaurants and certain entertainment venues may resume indoor service, the governor said.