District Court Denies Burger King’s Motion to Dismiss Putative Class Action Related to No-Poaching Provisions in Franchise Agreements

Arrington v. Burger King Worldwide, Inc., No. 1:18-cv-24128 (S.D. Fla. Oct. 5, 2018) – In October 2018, Jarvis Arrington, a former employee at a Burger King franchisee in Illinois, filed a class action complaint against Burger King Worldwide and Burger King Corporation (collectively, “Burger King” or “BKC”) for violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The plaintiffs alleged that BKC’s use of a no-hire provision in its standard franchise agreement was an anticompetitive restraint of trade that restricted employee mobility, artificially suppressing employee wages and bargaining power.[1]

The district court initially dismissed the action for failure to state a claim in March 2020. The case, however, was revived and remanded to the district court by the Eleventh Circuit in August 2022, after the plaintiffs successfully appealed the lower court’s determination that Burger King and its franchisees were not separate economic actors for purposes of federal antitrust laws.[2]
 
In March 2025, Burger King renewed its efforts for dismissal by filing a supplemental memorandum in support of its motion to dismiss the complaint (and proposed amended complaint).[3] Rather than focusing on whether the no-hire provision constituted a concerted action by Burger King and its franchisees as direct competitors, BKC’s 2025 memorandum argued that the no-hire provision constituted a vertical restraint of trade due to the vertical relationship that existed between BKC and its franchisees; thus the provision must be judged under the rule of reason analysis which requires the plaintiffs to show that the restraint of trade was unreasonable. 

Additionally, Burger King argued that a plaintiff has the burden of defining the proper antitrust “market” and demonstrating “actual evidence of direct impact on competition,” where the plaintiff alleges that a vertical restraint is unreasonable.  To that end, BKC argued that the plaintiffs failed to identify a product or geographic market, and the general economic studies included in the complaint to depict the harm allegedly caused by the no-hire agreements were insufficient to show an adverse impact specific to Burger King workers. 
 
The plaintiffs argued in their response that the fact that a vertical relationship generally exists between franchisors and franchisees does not define the type of restraint imposed by the no-hire agreements.[4] The plaintiffs maintained instead that Burger King and its franchisees were horizontal competitors in the labor market, because BKC’s franchisees hired workers separately and operated independently from each other and their corporate-owned counterparts. Thus, relying on the Seventh Circuit’s decision in Deslandes v. McDonald’s USA,[5] the plaintiffs argued that the no-hire agreements constituted a horizontal restraint between competitors that was per se unlawful under Section 1 of the Sherman Act. Alternatively, the plaintiffs contended that they still plausibly alleged an antitrust violation under the “quick-look” approach (which is an abridged version of the rule of reason approach), because “an observer with even a rudimentary understanding of economics” could determine that Burger King employees with brand-specific skills would likely have their wages suppressed when restrained from competing with the employers most likely to hire them—i.e., other Burger King franchisees.

The district court denied BKC’s motion to dismiss. Significantly, the court noted that even though determining the applicable standard in a Section 1 Sherman Act violation was “undoubtedly a question of law,” it nonetheless was a question that was “predicated on a factual inquiry.”[6]  The court, therefore, refused to rule on whether the per se or quick-look (or broader rule of reason) approach was the applicable test. Even so, the court found, when viewing the evidence in the light most favorable to the plaintiffs, the complaint sufficiently alleged that the no-hire agreement violated Section 1 of the Sherman Act under the per se and quick-look approaches.

The jury trial is scheduled to begin in the action on May 3, 2027. A final decision as to which antitrust test ultimately applies to the no-solicitation and no-hire restraints in BKC’s franchise agreements could have significant implications on other franchise systems that still require similar no-poaching provisions.


[1] Adrian K. Felix, Eleventh Circuit Revives Putative Class Action Against Burger King for Violation of Federal Antitrust Laws Based on No-Poaching Provisions in Franchise Agreements [“Eleventh Circuit Revives Action”], BILZIN SUMBERG (Nov. 14, 2022), https://www.bilzin.com/insights/publications/2022/11/putative-class-action-against-burger-king.
[2] See Eleventh Circuit Revives Action.
[3] Defs.’ Suppl. Memo. in Support of Defs.’ Mot. to Dismiss the Compl. [D.E. 109] at 11-12, Arrington v. Burger King Worldwide, Inc., No. 1:18-cv-24128 (S.D. Fla. 2018).
[4] Pls.’ Suppl. Memo. of Law in Opp’n to Defs.’ Mot. to Dismiss [D.E. 110] at 11, Arrington v. Burger King Worldwide, Inc., No. 1:18-cv-24128 (S.D. Fla. 2018) (citing Cal. Dental Ass’n v. F.T.C., 562 U.S. 756, 770 (1990)).
[5] Deslandes v. McDonald’s USA, LLC, 81 F.4th 699 (7th Cir. 2023).
[6] Order on Defs.’ Mot. to Dismiss [D.E. 111] at 5, Arrington v. Burger King Worldwide, Inc., No. 1:18-cv-24128 (S.D. Fla., 2018).