New Jersey Attorney General Spearheads Legal Fight Against "No-Poach" Employment Agreements

Matthew J. Platkin, along with a coalition of Attorneys General, urges a U.S. District Court to declare such contracts as 'presumptively unlawful,' potentially reshaping employment practices in the state.

In a significant legal move, New Jersey Attorney General Matthew J. Platkin has led a group of Attorneys General from 18 states and the District of Columbia in filing an amicus brief. The collective urges the U.S. District Court for the District of New Jersey to rule that "no-poach" agreements utilized by the tax preparation company Jackson Hewitt are inherently illegal.

"No-poach agreements are anticompetitive," said Attorney General Platkin. "They unfairly restrict workers’ future job prospects, limit their career mobility, and lower their earning potential."

The focal point of this legal action is a proposed class-action lawsuit filed by former tax preparers, who allege that Jackson Hewitt's no-poach clauses have directly harmed them. These clauses prevent workers at corporate-owned and franchise locations of Jackson Hewitt from being employed by each other, stifling the job market. According to the amicus brief, such agreements are "naked" horizontal restraints of trade, which are detrimental to both employees and the competitive labor market.

The coalition led by Attorney General Platkin argues that these agreements violate antitrust laws and are harmful to workers. Specifically, the agreement limits workers' options for better compensation and workplace conditions by restricting their ability to move freely between jobs within the same industry.

This is not the first time New Jersey has taken the lead in advocating for workers' rights. Earlier this year, the state co-led an initiative supporting the Federal Trade Commission’s proposed rule to eliminate most non-compete clauses in employment contracts. In 2020, New Jersey was also part of a multistate settlement with three major fast-food companies, effectively ending their usage of no-poach contracts.

Joining Attorney General Platkin in this amicus brief are Attorneys General from Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New York, North Carolina, Oregon, Pennsylvania, and Rhode Island.

The state's legal representation includes Deputy Attorneys General Viviana Hanley, Leslie Prentice, and Bryan Sanchez, along with Consumer Fraud Prosecution Assistant Section Chief Isabella Pitt. They operate under the guidance of Assistant Attorney General Brian F. McDonough from the Division of Law’s Affirmative Civil Enforcement Practice Group.

Residents who believe they have been affected by such anti-competitive practices are encouraged to file a complaint through the Attorney General’s Complaint Portal, which investigates violations under the New Jersey Antitrust Act to foster a fair and competitive labor market.