The Clause They Hid in Plain Sight

Until McDonald’s quietly stopped the practice, every single franchise agreement it issued contained an anti-poaching clause. That clause forced every franchise owner to promise they would not hire any worker employed by any other McDonald’s franchise — or by McDonald’s corporate itself — until at least six months after that person’s last day on the job. A companion clause went further and banned franchises from even approaching another franchise’s employees with a job offer.

This was a system built to function like a wall. A McDonald’s employee in Phoenix who heard that a franchise across town was paying more could not simply apply there. The potential employer was legally bound by their franchise agreement to turn her away. Her only real option: quit, wait six months with no income, and then try again. For a minimum-wage worker living paycheck to paycheck, a six-month waiting period is functionally a lifetime.

Plaintiffs Leinani Deslandes and Stephanie Turner worked at McDonald’s franchises while these clauses were in force and were directly blocked from taking higher-paying positions at other franchise locations. They brought the lawsuit that would force a federal appeals court to examine whether McDonald’s had been running a wage-suppression operation dressed up as standard contract language.

A Cartel in a Burger Wrapper

Antitrust law exists to stop exactly this kind of coordination. The Sherman Act prohibits monopolies in product markets, but — crucially — it also prohibits monopsonies in labor markets. A monopsony is what happens when a single buyer (or a group acting together) gains enough control over a market that workers or suppliers lose real alternatives and get paid less than they would in a competitive market. McDonald’s, operating both corporate-owned restaurants and franchised locations, created a system where its own corporate restaurants and its franchisee partners all agreed: nobody poaches from anybody else.

The appeals court confirmed this makes the arrangement horizontal in nature — meaning it is a coordination between competing businesses, not just an internal policy. Corporate McDonald’s and its franchisees compete for the same workers in the same local labor markets. When they all sign the same no-poach pledge, they stop competing. That is the definition of a cartel, even if the product being suppressed is wages instead of the price of oil.

The Supreme Court itself, in a 2021 case called NCAA v. Alston, made clear that antitrust law applies to labor markets the same way it applies to product markets. McDonald’s could not hide behind its burger output as a justification for suppressing what it paid the people who made those burgers.

The Non-Financial Ledger

What McDonald’s Took That Can’t Be Measured in Dollars

Leinani Deslandes did everything the system told her to do. She showed up, she worked, she learned. McDonald’s operates on a highly standardized training system: uniform layouts, uniform tasks, uniform procedures across every franchise in the country. Deslandes acquired skills — real, marketable skills — that had value across the entire McDonald’s system. And in a competitive labor market, those skills would have been her leverage. She could have walked into any other franchise and said: I already know how everything works here. That knowledge should have translated into a higher starting wage, or a faster promotion, or both.

But the court’s opinion explains something chilling about how McDonald’s structured wages from the beginning: workers at McDonald’s may have been paid below their actual productive value during the early part of their employment — effectively funding their own training through suppressed wages. The implicit deal in a fair labor market is that you accept lower pay early on, and then your wages rise once your skills are proven. The no-poach clause broke that deal. It removed the competitive pressure that would have forced wages to rise. McDonald’s captured the upside and left workers holding the loss.

The appeals court described this dynamic without softening it: the clause may have allowed franchises to “capitalize on workers’ sunk costs.” That language is clinical. Translate it into plain English: McDonald’s workers invested their own economic futures — in the form of below-market wages — to become skilled and productive employees, and then McDonald’s used contractual language to ensure those workers could never collect on that investment by finding a better offer elsewhere. The worker paid the tuition. McDonald’s kept the diploma.

There is something deeply personal in what the court reveals about how McDonald’s also limited the number of job classifications available to workers — meaning even internal promotion was constrained. Workers could not easily move up within a franchise, and they could not move laterally to a competitor franchise. They were boxed in on two sides simultaneously. The only exit was to quit entirely, absorb the six-month waiting period, and hope the new employer hadn’t already moved on. For someone raising a family on a fast-food wage, that exit door is not a real option. It is theater.

Legal Receipts: Straight From the Court’s Mouth

The Concurrence That Adds Teeth

The Numbers That Make This Real

Societal Impact Mapping

Economic Inequality: The Machine That Keeps Wages Down

The workers targeted by McDonald’s no-poach system are overwhelmingly people with limited economic cushion. Fast-food workers earn wages at the bottom end of the American income scale. These are the people for whom a $1-an-hour raise is the difference between affording a car repair or riding the bus in the dark. McDonald’s, by running a coordinated national agreement that eliminated wage competition across its entire franchise network, systematically denied those raises to hundreds of thousands of people.

The court’s opinion explains that in a genuinely competitive labor market, a worker’s wages rise over time in proportion to their increasing productivity and skills. The no-poach clause severed that connection. McDonald’s workers became more skilled over time but had no market mechanism to convert that skill into higher pay. The system extracted their labor at a fixed price point, regardless of their rising value. That is the operational definition of economic extraction.

The court also highlighted a particularly corrosive detail: McDonald’s limited the number of job classifications available to workers, which delayed or blocked internal promotion. This closed off the internal path to higher wages at the same time the no-poach clause closed off the external path. Workers were squeezed from both directions simultaneously, by design, inside a system that generated billions in revenue for shareholders and franchise owners.

The national scope of the clause matters enormously here. As the court directly asked: why did a no-poach agreement need to be national when restaurant labor markets are local? A worker in Charlotte is never going to commute to a McDonald’s in Fargo. The national reach served no business purpose related to training costs or operational consistency. Its only practical effect was to make the suppression of wages more total and more inescapable. Even in markets where McDonald’s was particularly dominant, workers could not escape to a franchise in another city.

The “Cost of a Life” Metric

To understand what this suppression means in daily life: the federal minimum wage has been frozen at $7.25 per hour since 2009. Fast-food workers in many states earn barely above that floor. A suppressed wage of even $1 to $2 per hour over a five-year career amounts to between $10,400 and $20,800 in stolen earnings per worker (roughly the cost of a year’s groceries and utilities for a family of four). Multiply that across the full McDonald’s franchise workforce, and the number becomes almost too large to print.

What Now? Who Is Accountable and Where to Push

The appeals court vacated the dismissal and sent the case back for full economic analysis. The fight is alive. Here is who has power over what happens next:

On the ground, the most effective counter-force to corporate wage suppression is worker organizing. Unions at fast-food chains remain difficult but not impossible; the Fight for $15 movement proved that coordinated action forces wage increases even without formal union recognition. Local worker centers, mutual aid networks, and community legal aid organizations provide the immediate infrastructure for workers who believe they were directly harmed by the no-poach clause to connect with attorneys pursuing the ongoing litigation.

If you worked at a McDonald’s franchise and were told you could not take a job at another franchise, or were discouraged from applying elsewhere, your experience is directly relevant to this case. Document it. Find a plaintiffs’ attorney. The remand keeps the courtroom door open.