WASHINGTON, D.C. – U.S. Senators Cory Booker (D-NJ) and Elizabeth Warren (D-MA) today introduced a bill to crack down on collusive "no poach" agreements that are often used by large franchisors to prohibit franchisees from hiring each other’s workers. The End Employer Collusion Act would ban these "no poach" agreements, which economists have found are a key factor in wage stagnation and limited worker mobility.
Congressman Keith Ellison will introduce companion legislation in the House of Representatives next week.
“As corporate concentration leads to fewer and fewer options for workers to improve their bargaining power, we must crack down on anti-competitive practices that keep workers stuck and wages down,” Booker said. "More than half of the largest franchisors in this country - companies like Wendy's, Carl’s Jr., and H&R Block - use some form of anti-competitive ‘no poach’ agreements that prevent their workers from translating their value into higher wages.”
“More concerning - most workers don’t even know such agreements exist,” Booker added. “Just as companies can't collude to fix prices, franchises shouldn’t be allowed to collude to suppress their workers' wages. Our bill would crack down on this exploitative practice by banning companies from using 'no poach' agreements in contracts and franchise agreements."
“The system is rigged against hard working people, and one way is through “no poaching” agreements, which allow powerful corporations to keep their employees’ wages low and limit workers’ alternative employment options,” Warren said. “I’m glad to join Senator Booker to introduce legislation that would ban these anti-worker, anti-market clauses.”
"The system is rigged when giant companies are colluding to keep workers' wages down by agreeing not to hire each others' workers,” Ellison said. “That's disgusting and it needs to change. I'm proud to stand with Senators Booker and Warren to abolish these no-poach agreements and put a stop to this collusion.”
Today's introduction comes on the heels of a letter Booker and Warren sent to the Department of Justice in December urging the agency to crack down on such agreements and clarify guidance it had issued in late 2016 indicating that such clauses were likely illegal.
Dating back to his days as tenant lawyer, City Council member, and Mayor of Newark, Booker has been a leading voice for economic justice and the fundamental promise that if you work hard in America, America should work for you. As part of this commitment, Booker has been a vocal advocate for cracking down on corporate practices that depress wages and limit opportunity. Last year, he introduced a bill targeting companies that outsource much of their labor costs to contractors and temp workers rather than hiring direct employees. He also recently pressed antitrust regulators on corporate concentration and the increasing trend of “monopsony” power, which limits worker mobility and depresses wages.