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Deslandes v. McDonald's USA, LLC

United States District Court for the Northern District of Illinois, Eastern Division

June 25, 2018, Decided; June 25, 2018, Filed

No. 17 C 4857

Opinion

MEMORANDUM OPINION AND ORDER

After a no-hire agreement prevented plaintiff from obtaining a position with a rival employer, plaintiff Leinani Deslandes ("Deslandes") filed suit asserting, among other things, that defendants' no-hire agreement violates the Sherman Antitrust Act, 15 U.S.C. § 1. Defendants McDonald's USA, LLC and McDonald's Corporation move to dismiss. For the reasons set forth below, the [*2]  Court grants in part and denies in part defendants' motion to dismiss [34].

I. BACKGROUND

Plaintiff's story is one of employment success: she started as an entry-level crew member paid $7.00 per hour at a McDonald's franchise and worked her way up into management. When she applied for a better-paying position with a competing McDonald's restaurant, she was foiled by a no-hire agreement which forbid the competing McDonald's restaurant to hire both current employees of other McDonald's restaurants and anyone who had worked for a competing McDonald's restaurant in the last six months. Given that most individuals in the low-skill employment market do not have the luxury of being unemployed by choice for six months, the no-hire provision effectively prevented competing McDonald's franchises (as well as the company-owned stores) from competing for experienced, low-skill employees. The following facts are from plaintiff's complaint and are taken as true.

Defendant McDonald's USA, LLC is a wholly-owned subsidiary of defendant McDonald's Corporation. Plaintiff generally refers to them collectively as "McDonald's." The ubiquitous purveyor of hamburgers serves 68,000,000 customers per day from some [*3]  36,000 outlets around the world. According to plaintiff's complaint, nearly two million people work for McDonald's or its franchisees.

Many McDonald's-brand restaurants are owned and operated by McDonald's Operating Companies ("McOpCos"), which are direct or indirect subsidiaries of McDonald's Corporation. McDonald's also franchises McDonald's-brand restaurants. Thus, many McDonald's-brand restaurants are independently owned and operated by franchisees. McDonald's receives revenue from the franchisees in the form of rent, royalties and fees.

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2018 U.S. Dist. LEXIS 105260 *; 2018-1 Trade Cas. (CCH) P80,435; 2018 WL 3105955

LEINANI DESLANDES, Plaintiff, v. McDONALD'S USA, LLC, McDONALD'S CORPORATION, and DOES 1 through 10, Defendants.

Subsequent History: Motion granted by, in part, Motion denied by, in part, Motion denied by Deslandes v. McDonald's USA, LLC, 2019 U.S. Dist. LEXIS 224137 (N.D. Ill., July 17, 2019)

Related proceeding at Turner v. McDonald's United States, Llc, & McDonald's Corp., 2020 U.S. Dist. LEXIS 78435 (N.D. Ill., Apr. 24, 2020)

CORE TERMS

franchisees, restaurants, no-hire, hire, antitrust, franchise, horizontal, training, hamburgers, Consumer, procompetitive, subsidiaries, anticompetitive, ancillary, suppliers, competitors, quick-look, output, naked, entry-level, intrabrand, customers, low-skill