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H&R Block No-Poach Agreements Antitrust Class Action

H&R Block has over 10,000 of its own offices, in the US and elsewhere, plus 3,300 franchises across the US. The complaint for this class action alleges that the company does not permit its various corporate-owned offices and franchises to compete with each other for employees. Such no-poach agreements violate antitrust laws. 

The class for this action is all tax professionals and managers who worked at any H&R Block location in the US, whether corporate- or franchisee-owned, at any time between January 1, 2009 and May 10, 2018.

Many fast food companies have been sued in recently months for no-poach agreements, which stop employees from competing for work and thus keep wages suppressed. But fast food joints are the only businesses that are being more closely scrutinized these days. The tax preparation giant H&R Block is now accused of the same behavior. 

The complaint claims that the no-poach agreements began at least as early as January 2009 and continued at least until May 2018. The agreements supposedly prevented H&R Block offices, including both corporate-owned offices and franchisees, from recruiting or hiring each other’s employees. 

The agreement was explicitly set forth in the standard franchise agreement, which contained a “Restriction on Competition” clause: “During the term of this Agreement, neither Franchisee nor any of the Franchisee’s Associates will, without H&R Block’s prior written consent … [s]olicit for employment any person who is employed by H&R Block or by any other Franchisee of H&R Block.”

The standard franchise agreement states that the various offices are “not a joint venturer, joint employer, partner, agent, fiduciary, or employee” of H&R Block. According to the complaint, it also states that the offices are in competition with each other. The offices are to operate within a certain territory but do not have exclusive rights to the territory; they may “face competition from other offices that [H&R Block] franchise[s] or own[s], or that are franchised or owned by H&R Block’s parents or affiliates…”

The restriction on competing for employees is particularly meaningful because tax preparation is a seasonal business. This means that offices need to hire thousands of trained and knowledgeable employees every year. 

No-poach agreements are generally considered to suppress wages by preventing competition for employees. To support this charge, the complaint shows a chart comparing average salaries for various H&R Block positions and for the same positions nationally. All positions, from receptionist on up, show significantly lower salaries for H&R Block workers. This is particularly evident in the position of senior tax analyst. H&R Block’s senior tax analyst average salary is $37,232, as compared to a national average for senior tax analysts of $79,948—showing a difference of 53%.

As state attorneys general started cracking down on fast food franchises’ no-poach agreements, H&R Block announced that it had ended its own no-poach agreements. Still, the complaint claims that employees have suffered from suppressed pay levels for years.

Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

H&R Block No-Poach Agreements Antitrust Complaint

February 25, 2019

H&R Block has over 10,000 of its own offices, in the US and elsewhere, plus 3,300 franchises across the US. The complaint for this class action alleges that the company does not permit its various corporate-owned offices and franchises to compete with each other for employees. Such no-poach agreements violate antitrust laws. 

hr_block_no-poach_agreement_compl.pdf

Case Event History

H&R Block No-Poach Agreements Antitrust Complaint

February 25, 2019

H&R Block has over 10,000 of its own offices, in the US and elsewhere, plus 3,300 franchises across the US. The complaint for this class action alleges that the company does not permit its various corporate-owned offices and franchises to compete with each other for employees. Such no-poach agreements violate antitrust laws. 

hr_block_no-poach_agreement_compl.pdf
Tags: Antitrust, No-Poach Agreements