The Effect of No-poaching Restrictions on Worker Earnings in Franchised Industries

We investigate the effect of the Washington State Attorney General’s enforcement campaign against employee no-poach clauses in franchising contracts, which unfolded from 2018 until early 2020. We employ a dataset linking chain-level franchising contract provisions with employer-identified job ads from Burning Glass Technologies (BGT). We use several staggered Difference-in-Difference methodologies to measure the effect of removing franchise no-poach clauses on earnings posted in job ads following settlements reached with the Attorney General. Our preferred specification estimates a 3.3% increase in chain-specific annual earnings following no-poach removal.

Keywords: franchising, monopsony, no-poach, horizontal anti-competitive practices

JEL Classification: J01, J41, J42, K21, L2, L41

Suggested Citation: Suggested Citation

Callaci, Brian and Pinto, Sergio and Steinbaum, Marshall and Walsh, Matthew, The Effect of No-poaching Restrictions on Worker Earnings in Franchised Industries (July 6, 2022). Available at SSRN: https://ssrn.com/abstract=4155577 or http://dx.doi.org/10.2139/ssrn.4155577