Over the last few years companies have faced an upswing in antitrust litigation related to no-poach/no-hire agreements. Recent decisions involving no-poach/no-hire agreements between franchisors and franchisees have created uncertainty as to whether these entities can be liable for Section 1 antitrust violations, and which legal standards apply in such cases, creating substantial risk for franchisors and franchisees alike.

For years, franchisors and franchisees had a viable argument to block Section 1 conspiracy claims using the Supreme Court’s reasoning in Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 769 (1984). Sherman Act Section 1 offenses require concerted action between more than two entities. In Copperweld, the Court held that parents and subsidiaries shared a “complete unity of interest,” meaning they were “incapable of conspiring with each other for purposes of § 1 of the Sherman Act.”

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