The Washington Post reports that tax preparer H & R Block has agreed to end it’s no-hire policy, which prohibited workers from switching from one tax office to another.
H&R Block agreed to end this practice after state regulators started investigating other companies, such as Burger King and Panera, for similar policies.
A federal court recently held that “[e]ven a person with a rudimentary understanding of economics would understand” that these no-hire policies reduce employee wages.
Because owners of different H & R Block locations didn’t have to compete for the best workers, the theory goes, the wages of all H & R Block employees were suppressed. The lack of competition in the job market for tax preparation staff would cause everyone’s pay rates to suffer.
Washington Attorney General Reaches Settlements with 23 Companies Over No-Hire Policies
The Washington Attorney General has already reached settlements with 23 companies that had adopted no-hire, no-poach, or non-solicitation policies. Poaching and solicitation generally involve one franchise location actively looking to attract the best employees from another franchise location, whereas no-hire policies go a step further and prevent ever hiring a current (or often former) employee of a different location.
Among the companies that have reached settlements with the Washington Attorney General are: Applebee’s, Panera, and Sonic.
The Washington Attorney General has said, “According to economists, these ‘no-poach’ clauses decrease competition, reduce opportunities for low-wage workers and stagnate wages.”
Currently the Washington investigation has focused mostly on fast food chains, but other companies that use franchise models, such as H & R Block, may also get swept in.
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