Western District Of Kentucky Upholds Complaint Challenging Franchise No-Poach Agreements As Horizontal Restraints Of Trade
On October 21, 2019, Judge Joseph H. McKinley Jr. of the United State District Court for the Western District of Kentucky issued a mixed order and opinion that denied Defendants Papa John’s International, Inc. and Papa John’s USA’s (“Papa John’s” or “Defendants”) motion to dismiss Plaintiffs’ class claims, but granted Defendants’ motion to compel one of the named plaintiffs to arbitrate. In Re Papa John’s Employee and Franchisee Employee Antitrust Litigation, NO: 3:18-CV-00825-JHM (W.D. Ky. 2019). The case involves three consolidated putative class actions filed by current and former employees against defendants, alleging no-poach, or no-hire, clauses in the company’s franchise agreements are a horizontal restraint on trade and a per se violation of Section 1 of the Sherman Act. The Court ruled that plaintiffs adequately alleged a per se violation, but that discovery would be necessary to determine what standard of review would apply moving forward.