47 F.4th 1247
11th Cir.2022Background
- Burger King is a franchised system: more than 99% of U.S. Burger King restaurants are independently owned franchises; corporate ownership is minimal and franchise agreements affirm franchisee independence.
- From ~2010 until September 2018, Burger King’s standard franchise agreement included a "No‑Hire Agreement" prohibiting Burger King (the Corporation) and franchisees from soliciting or employing another Burger King employee for six months after that employee left a Burger King employer, unless the employer consented.
- Franchise agreements state franchisees are independent contractors with sole responsibility for hiring, wages, benefits, and other employment terms; Burger King’s disclosures warn franchisees they will face competition from other Burger King restaurants.
- Plaintiffs (former Burger King franchise employees) allege the No‑Hire Agreement suppressed wages, reduced benefits, and restricted job mobility by eliminating inter‑franchise competition for labor—violating §1 of the Sherman Act.
- The district court dismissed, holding Burger King and its franchisees formed a single economic enterprise incapable of "concerted action" under §1; the Eleventh Circuit reversed, finding the complaint plausibly alleged concerted action and remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Burger King and its franchisees are capable of "concerted action" under §1 of the Sherman Act | The No‑Hire Agreement joins independent franchised decisionmakers and deprives the labor market of independent centers of hiring competition | Franchisees are not separate for antitrust purposes—Burger King and franchisees form a single economic enterprise, so §1 does not apply | Reversed district court: complaint plausibly alleges concerted action; franchisees and Burger King can be separate actors for §1 analysis (per American Needle framework) |
| Whether the restraint is unreasonable and what standard of review applies (per se, quick‑look, or rule of reason) | Plaintiffs allege wage suppression and reduced mobility caused by the agreement, implying an unreasonable restraint | Burger King contends any restraint was not unreasonable and requests this Court resolve the applicable standard and affirm | Court declined to decide on reasonableness or applicable standard, remanding those questions to the district court for further proceedings |
Key Cases Cited
- Am. Needle, Inc. v. Nat’l Football League, 560 U.S. 183 (2010) (concerted‑action inquiry asks whether separate economic actors joined to deprive market of independent decisionmaking)
- Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752 (1984) (distinction between single‑firm conduct and concerted action under §§1–2)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard for antitrust conspiracy claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standards: courts ignore mere conclusory allegations)
- Quality Auto Painting Ctr. of Roselle, Inc. v. State Farm Indem. Co., 917 F.3d 1249 (11th Cir. 2019) (elements required to state a §1 Sherman Act claim)
- Procaps S.A. v. Patheon, Inc., 845 F.3d 1072 (11th Cir. 2016) (discusses modes of antitrust analysis: per se, quick‑look, rule of reason)