Could a No-Poach Agreement Be Limiting Your Job Opportunities?

Workers benefit when employers compete to hire them. Agreements between businesses not to recruit, solicit, or hire one another’s workers can restrict job opportunities, reduce bargaining leverage, and potentially suppress wages, benefits, or working conditions.

Workers may not know that a no-poach agreement or hiring restriction exists. A restriction can appear in a franchise agreement, vendor or service contract, or an informal understanding between businesses. A worker may discover it only after being told that another location or company cannot hire them.

What No-Poach Agreements Can Mean for Workers

The January 2025 DOJ/FTC Antitrust Guidelines for Business Activities Affecting Workers explain how the agencies assess business practices affecting workers under the antitrust laws. The guidelines state that antitrust law protects competition for labor and that competition among employers can benefit workers through better wages, benefits, and other terms and conditions of work. The agencies also state that conduct harming competition for workers can lead to fewer job opportunities, lower wages, and worse job quality.

For no-poach conduct specifically, the guidelines state that businesses competing for workers may violate antitrust law if they agree not to recruit, solicit, or hire workers. The U.S. Department of Justice (“DOJ”) may bring felony criminal charges where appropriate, and the guidelines also note that such agreements may be subject to civil liability even when criminal charges are not pursued. The DOJ and FTC further state that such agreements can violate the antitrust laws whether they are informal or formal, written or unwritten, or spoken or unspoken.

The guidelines use “no-poach” to describe agreements between businesses not to hire, solicit, or otherwise compete for current, former, or potential workers. Their examples include an agreement requiring one company to obtain another company’s permission before trying to hire an employee. The agencies also state that an agreement not to “cold call” another company’s workers is a no-solicit agreement even if workers remain free to apply on their own.

The guidelines do not say that every hiring restriction is automatically unlawful. They explain that a restraint may require a fuller analysis when it is subordinate and collateral to a broader business collaboration, such as a joint venture, and is reasonably necessary to achieve that collaboration’s procompetitive potential. The legality of a particular restraint therefore depends on its facts and context.

For workers, the practical concern is reduced competition for their labor. A hiring restraint can limit opportunities to move between employers or locations and can affect the competition that ordinarily influences wages, benefits, and other terms of work.

The agencies also explain that businesses may compete for the same workers even when they sell different products or services. For antitrust analysis, the relevant question can be whether the businesses compete to hire or retain workers in the same labor market.

Warning Signs of a Possible No-Poach or No-Hire Restriction

• A manager says another location or business is not allowed to hire you.
• A transfer or job application is rejected because the businesses have an agreement, policy, or understanding about employees.
• A prospective employer must obtain your current employer’s permission or pay a penalty before hiring you.
• Recruiters are told not to contact employees of certain companies or franchise locations.
• Workers hear similar explanations from separate businesses that otherwise compete for labor.

Franchise Workers Can Be Affected

The guidelines address franchise systems directly. They state that no-poach clauses in franchise agreements are subject to antitrust scrutiny and note that franchisors often compete with franchisees for workers. The guidelines further state that a franchisor may violate antitrust law by organizing or enforcing a no-poach agreement among franchisees that compete for workers, and that written or unwritten agreements among franchisees not to poach, hire, or solicit one another’s workers may violate federal or state law.

State law may provide additional protection. For example, Washington law prohibits a franchisor from restricting a franchisee from soliciting or hiring an employee of the franchisor or another franchisee of the same franchisor. State requirements vary.

Recent Enforcement and a Worker Case Example

Federal enforcement is not limited to franchise restaurants. In February 2026, the FTC finalized a consent order requiring building-services contractor Adamas and affiliated businesses to stop enforcing no-hire agreements that the FTC alleged restricted customers from hiring Adamas workers without a significant penalty.

In In re Papa John’s Employee and Franchisee Employee Antitrust Litigation, workers challenged franchise-agreement provisions that allegedly restricted hiring among Papa John’s locations.

Law360 reported on August 17, 2026, that a Kentucky federal court had granted final approval to a $5 million settlement. According to Law360, the settlement class covers workers employed at Papa John’s-branded restaurants in the United States from December 18, 2014 through December 31, 2021 who received more than $200 in compensation during that period.

The article also reported that Papa John’s agreed to prohibit the use of no-poach provisions in its franchise agreements for five years and that company executives would receive antitrust compliance training. The court observed that the settlement also provides “meaningful forward-looking protection.” The settlement is not a finding that Papa John’s violated the law; Papa John’s has denied the claims and has not admitted wrongdoing or liability.

What Workers Should Preserve

If you suspect a hiring restriction, preserve records lawfully. Useful materials may include job postings, applications, offers, rejection messages, transfer requests, emails or texts discussing hiring limits, pay records, and the names of managers or recruiters with relevant knowledge. Do not take trade secrets, customer information, or materials you are not authorized to possess.

Contact Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is available to evaluate potential claims involving no-poach, no-hire, wage-fixing, worker-mobility, and related antitrust practices. A confidential consultation can help a worker understand which laws may apply and whether filing deadlines may affect potential claims.