H&R Block, the Kansas City-based tax services company, was recently sued by a former employee alleging harm as a result of the firm’s “no-poach” hiring practices. Now, H&R Block faces an investigation in Washington state over the same issue.
Washington Attorney General Bob Ferguson’s office is looking into H&R Block and other businesses that are said to use no-poach clauses in contracts with franchisees.
No-poach agreements are used in the fast-food industry and other businesses to prohibit franchise owners from hiring employees away from other stores in the same chain. Backers say the agreements help franchisees avoid incurring the cost of training employees only to have them stolen away. Opponents say the clauses artificially suppress wages for workers by limiting their alternatives.
In H&R Block’s case, Melissa Ramsey, a former employee at an office in the Kansas City area, sued the company alleging she had been unable to find employment at another H&R Block office after the one where she worked was closed.
Ramsey’s lawsuit says a no-poach clause has been standard in H&R Block contracts since 2009, and that employees are much less marketable and see diminished wages as a result.
Read more: Kansas City Star