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Antitrust and Unfair Competition Law E-Briefs, News and Notes: June 2025

By James Dugan

Last month, Judge Jose E. Martinez of the U.S. District Court for the Southern District of Florida denied the Burger King Defendants’ (“Burger King”) motion to dismiss a putative class action alleging that its “No-Hire” agreements violate Section 1 of the Sherman Act.  The Court had previously dismissed the case on the grounds that Plaintiffs failed to allege that Burger King and its franchisees were separate economic actors, but Judge Martinez was reversed by the Eleventh Circuit.  Ruling again on the remanded proceedings, the Court found a plausibly alleged conspiracy. 

As alleged, Burger King executes a standard contract with franchisees that includes a “No-Hire Agreement” which prohibits the entities “from attempting to poach any current employee of [Burger King] or another Burger King franchisee or hire any employee . . . for six months after the employee leaves its first Burger King restaurant . . ..”  (2). 

The plaintiffs, all employees at one time of Burger King franchise restaurants, alleged “that through the No-Hire Agreement, the “franchisees, at the direction of and with the assistance of Burger King itself, have together colluded to depress wages and employment opportunities of employees who work in Burger King branded restaurants through[out] the United States.”  (3).  Plaintiffs claimed that this constituted a per se Section 1 violation, but alternatively claimed that a quick look analysis would reach the same result. 

Burger King moved to dismiss on three grounds:

1. Plaintiffs failed to state a claim under Section 1 of the Sherman Act;
2. Plaintiffs failed to plausibly allege that Defendants engaged in wrongful conduct; and
3. claims prior to October 2014 were time barred.

Notably, the Court declined to opine on whether a per se, quick look, or full-blown rule of reason analysis was proper in this case.  Nonetheless, or perhaps somewhat counterintuitively, the Court concluded that a claim was plausibly alleged “under both the per se rule and quick look analysis,” but cautioned that “more factual development is necessary to determine which standard of review will apply to the No-Hire Agreement.”  (6).  Thus, one of the important takeaways from the opinion may be that caution must be exercised before presuming that surviving a motion to dismiss under a per se allegation will necessarily mean that the per se rule will continue to be the standard at later stages of the lawsuit. 

Moving on to the second ground for dismissal, the Court—perhaps exercising a guided caution from the Eleventh Circuit—concluded that “Plaintiffs sufficiently allege that each Defendant played a role in the purported conspiracy.”  (6).  On remand, there was no discussion of whether the entities were separate economic actors and thus a swift conclusion that “Plaintiffs’ allegations are sufficient to allow this Court to reasonably infer the involvement of all Defendants in the purported conspiracy.”  (7).

Lastly, the Court rejected Defendants’ argument that pre-October 2014 claims were time barred, finding that Plaintiffs sufficiently pled fraudulent concealment.  Of note here is the Court rejected Burger King’s argument that there could not be fraudulent concealment because “the franchise agreements were readily accessible.”   (8).  Siding with Plaintiffs, the court found plausible allegations that despite this, “Burger King concealed its misconduct in many ways,” including by misrepresentations made to prospective employees to lead them to believe that their employment would not be “constrained by the No-Hire Agreement . . ..”  (8).  Both sides of the Antitrust Bar may find this reasoning notable when contemplating their Statute of Limitations arguments.

In sum, and in a pleasant reversal for former Burger King employees, another no-poach antitrust case will proceed past the motion to dismiss stage.  Judge Martinez’s opinion joins the rapidly, and rockily, developing body of case law that applies antitrust principles to the market that matters most to working Americans—the labor market.