Settlement Agreement Between States and Five Guys Franchisor LLC
Fourteen states investigated “no-poach†agreements (clauses, often contained in franchise agreements, which prevent workers from switching between employers of the same franchise in order to obtain a better job with a higher salary or improved working conditions). The states settled with four national fast food franchisors, Dunkin’, Arby’s, Five Guys, and Little Caesars, who agreed to cease using “no-poach†agreements that restrict the rights of fast food workers to move from one franchise to another within the same restaurant chain. Under the terms of the settlements, the franchisors will stop including no-poach provisions in any of their franchise agreements and stop enforcing any franchise agreements already in place. The franchisors have also agreed to amend existing franchise agreements to remove no-poach provisions and to ask their franchisees to post notices in all locations to inform employees of the settlement. Finally, the franchisors will notify the attorneys general if one of their franchisees tries to restrict any employee from moving to another location under an existing no-poach provision. Since the investigation began, Wendy’s provided confirmation that it never used no-poach provisions in their contracts with franchisees. Investigations into Burger King, Popeyes, and Panera continue.
Settlement Agreement Between States and Dunkin’ Brands, Inc.
Fourteen states investigated “no-poach†agreements (clauses, often contained in franchise agreements, which prevent workers from switching between employers of the same franchise in order to obtain a better job with a higher salary or improved working conditions). The states settled with four national fast food franchisors, Dunkin’, Arby’s, Five Guys, and Little Caesars, who agreed to cease using “no-poach†agreements that restrict the rights of fast food workers to move from one franchise to another within the same restaurant chain. Under the terms of the settlements, the franchisors will stop including no-poach provisions in any of their franchise agreements and stop enforcing any franchise agreements already in place. The franchisors have also agreed to amend existing franchise agreements to remove no-poach provisions and to ask their franchisees to post notices in all locations to inform employees of the settlement. Finally, the franchisors will notify the attorneys general if one of their franchisees tries to restrict any employee from moving to another location under an existing no-poach provision. Since the investigation began, Wendy’s provided confirmation that it never used no-poach provisions in their contracts with franchisees. Investigations into Burger King, Popeyes, and Panera continue.
Settlement Agreement Between States and Arby’s Restaurant Group, Inc.
Fourteen states investigated “no-poach†agreements (clauses, often contained in franchise agreements, which prevent workers from switching between employers of the same franchise in order to obtain a better job with a higher salary or improved working conditions). The states settled with four national fast food franchisors, Dunkin’, Arby’s, Five Guys, and Little Caesars, who agreed to cease using “no-poach†agreements that restrict the rights of fast food workers to move from one franchise to another within the same restaurant chain. Under the terms of the settlements, the franchisors will stop including no-poach provisions in any of their franchise agreements and stop enforcing any franchise agreements already in place. The franchisors have also agreed to amend existing franchise agreements to remove no-poach provisions and to ask their franchisees to post notices in all locations to inform employees of the settlement. Finally, the franchisors will notify the attorneys general if one of their franchisees tries to restrict any employee from moving to another location under an existing no-poach provision. Since the investigation began, Wendy’s provided confirmation that it never used no-poach provisions in their contracts with franchisees. Investigations into Burger King, Popeyes, and Panera continue.
State of Wisconsin et al. v. Indivior, No. 16-5073 (E.D. Pa. Sept. 22,2016)
Plaintiff states alleged that the makers of Suboxone, a drug used to treat opioid addiction, engaged in a scheme to block generic competitors and raise prices. Specifically, they are conspiring to wtich Suboxone from a tablet version to a flim in order to prevent or delay generic entry. The states allege that the manufacturers engaged in “product hopping” in which a company makes slight changes to its product to extend patent protections and prvent generic alternatives. The complaint was filed under seal.
New York et al. v. Cephalon, No. 2:16-cv-04234 (E.D. Pa. Aug. 4, 2016)
In May 2015, the FTC settled a “pay-for-delay” suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations. In August 2016, forty-eight states filed suit in the Eastern District of Pennsylvania against Cephalon alleging anticompetitive conduct by Cephalon to protect the profits it earned from having a patent-protected monopoly on the sale of its landmark drug, Provigil. According to the complaint, Cephalon’s conduct delayed generic versions of Provigil from entering the market for several years. The complaint alleged that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable. Before it was declared invalid, Cephalon was able to use the patent to delay generic competition for nearly six additional years by filing patent infringement lawsuits. Cephalon settled those lawsuits by paying competitors to delay sale of their generic versions of Provigil until at least April 2012. Consumers, states, and others paid millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected. A settlement was filed with the complaint, which includes $35 million for distribution to consumers who bought Provigil.
United States and North Carolina v. Charlotte-Mecklenburg Hospital Authority d/b/a Carolinas Healthcare System
North Carolina and USDOJ filed suit alleging that Atrium Health, formerly known as Carolinas HealthCare System illegally reduced competition in the health care market in Charlotte and limited consumers’ ability to shop around for better deals on health care. Atrium is based in Charlotte and operates Carolinas Medical Center and nine other hospitals in the Charlotte area. It dominates the hospital market in the Charlotte region with a 50 percent share of the market and approximately $8.7 billion in annual revenues. The state alleged that Atrium acted unlawfully to preserve its dominance in the Charlotte health care market by using its market power to require steering restrictions in its contracts with every major insurer. These provisions have prevented insurers from, among other things, introducing health plans that encourage patients to use medical providers that offer lower priced, higher-quality services. The plaintiffs sought injunctive relief and attorneys fees. After the court denied defendants’ motion to dismiss, the parties settled. Under the terms of the settlement, Atrium is prohibited from using anticompetitive steering restrictions in contracts between commercial health insurers and its providers in the Charlotte, North Carolina metropolitan area. These steering restrictions prevented health insurers from promoting innovative health benefit plans and more cost-effective healthcare services to consumers.
Florida et al. v. Service Corporation International, No. A13CV1082LY (W.D. Texas Jan. 2, 2014)
SCI, the nation’s largest funeral home chain, sought to acquire Stewart Enterprises, another large funeral home chain. Seven states and the FTC entered into consent agreements with SCI specifying which funeral homes would be divested in 59 separate markets. In a separate consent agreement, SCI agreed to provide the state plaintiffs with the same notices, requirements for approval and compliance review as to divestitures and future acquisitions included in the FTC’s consent decree and to pay the state’s costs and attorneys’ fees..
In re DDAVP Antitrust Litigation
33 states investigated “pay for delay” allegations relating to DDAVP, a drug used to alleviate bed-wetting. States alleged that Aventis, holder of the patent for the medication, engaged in a scheme to delay the regulatory approval and sale of a generic version of DDAVP, in violation of state and federal antitrust law. States and defendants entered into a settlement under which states received $3.45 million, not as a civil penalty and defendants did not admit guilt.
State ex rel. Cooper v. McBarnette, No. 10 CV 020647 (N.C. Super Ct. Wake County, Dec. 21. 2010)
State sued defendant and his company for agreeing not to bid at auctions of foreclosed properties, after being paid by other bidders. Defendant was enjoined from further participation in real estate auctions, paid fines to the state and restitution to the property owners.
U.S. and Plaintiff States v. Republic Services
Two of the three largest waste hauling companies in the U.S. sought to merge. The United States and plaintiff states reached a settlement under which the parties would divest 11 landfills, 8 waste transfer stations and numerous routes within the plaintiff states.
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