IHOP, New York Franchisees Hit with Antitrust Class Action Over Alleged No-Hire Agreements

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A proposed class action lawsuit filed in New York looks to represent a proposed class of individuals who worked for IHOP between January 1, 2014, and August 20, 2018, and were allegedly subject to “long-standing and illegal” mutual non-solicitation and no-hire agreements between franchisees throughout the state. Filed against Brooklyn Hop 2 LLC; DineEquity, Inc.; International House of Pancakes, LLC; IHOP Franchisor LLC; and IHOP Restaurants LLC, the 21-page complaint alleges the entities’ collusive conduct has significantly reduced proposed class members’ wages and amounts to a violation of the Sherman Antitrust Act. From the suit:

“Upon information and belief, Defendants conspired not to actively solicit or hire each other's employees as part of one overarching conspiracy to suppress the compensation of their employees, including Plaintiff and Class Members. The desired effect was obtained. Defendants’ conspiracy suppressed Plaintiff's and the Class's compensation and restricted competition in the labor markets in which Plaintiff and the other members of the Class sold their services. It did so through an overarching agreement concerning mutual non-solicitation and no-hiring.”