In the State of Washington case, what specific program's franchise agreements were investigated regarding Engel & Volkers?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
In August of 2019 the Washington State Office of the Attorney General initiated an investigation into "nopoach" provisions used by Engel & Völkers in its franchise agreements for its residential brokerage program. The investigation was part of a broader investigation into the use of no-poach provisions by franchisors in general. The matter was resolved by Engel & Völkers and the Washington State Office of the Attorney General entering into an Assurance of Discontinuance, approved by the King County Superior Court on September 30, 2019. Pursuant to the Assurance of Discontinuance Engel & Völkers agreed to not enforce no-poaching provisions in its existing agreements in the U.S. and attempt to amend its agreements with franchisees in Washington to delete such provisions.
Source: Item 3 — LITIGATION (FDD pages 17–21)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the State of Washington investigated the franchise agreements related to Engel & Volkers' residential brokerage program. The investigation, initiated by the Washington State Office of the Attorney General in August 2019, focused on "no-poach" provisions within these agreements. These provisions typically restrict franchisees from hiring employees from other franchises within the same system.
The investigation was part of a broader inquiry into the use of no-poach clauses by franchisors in general, reflecting a concern that such provisions could stifle competition and limit employee mobility. To resolve the matter, Engel & Volkers entered into an Assurance of Discontinuance with the Washington State Office of the Attorney General, which was approved by the King County Superior Court on September 30, 2019.
As a result of the Assurance of Discontinuance, Engel & Volkers committed to not enforcing no-poaching provisions in its existing franchise agreements across the U.S. Furthermore, the company agreed to attempt to amend its agreements with franchisees specifically in Washington to remove these provisions altogether. This outcome highlights the importance of franchisees understanding the legal and regulatory landscape concerning franchise agreements, particularly regarding clauses that could impact their ability to hire and retain employees.