What was the date the State of Washington filed the lawsuit against Jersey Mike's?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 3. LITIGATION
The State of W ashington v. Jersey Mike's Franchise Systems, Inc.; Auburn JM, LLC; BCG-Northwest, LLC, Berry Investment Group, Ltd.; Elsterly, LLC; FM Restaurants, Inc.; Food Adventures, Inc.; Golden Springs, LLC; JM Northtown, LLC; JM Puyallup, Inc.; JM Restaurants, Inc.; JM Silverdale, LLC; JM Spokane, LLC; Larson & Associates, LLC; Majestic Eagle, LLC; Patrikor Corp.; Red Polo Ventures, LLC; Tin Star Subs, LLC; Trieb, LLC; Doe 1; Doe 2; Doe 3; Doe 4; and Doe 5, Case No. 18-2-25822-7 (State of Washington King County Superior Court, Oct. 15, 2018). On October 15, 2018, the State of Washington, through its Attorney General, sued JMFS, and each of its franchisees owning restaurants located the State of Washington ("Washington Franchisees"), alleging that JMFS and Washington Franchisees violated the Washington Consumer Protection Act based on the former inclusion in legacy franchise agreements of a so-called 'no-poach' provision prohibiting franchisees from soliciting or hiring JMFS's and other franchisees' current employees. Prior to the complaint's filing, JMFS had publicly announced that it would not enforce the provision in all existing franchise agreements nationwide and had removed the provision from its form franchise agreement. In addition, JMFS amended all of its franchise agreements for re staurants located in Wa shington. To resolve the di spute, JMFS and the State of Washington entered into an Assurance of Discontinuance on August 23, 2019, which required JMFS to continue its franchising practice by not including the 'no-poach' provision in a ny future franchise agreements and to refrain from enforcing the provision in any existing franchise agreements. Further, JMFS
agreed to pay the State of Washington $150,000 without admitting to any fact, liability, misconduct or wr
Source: Item 3 — LITIGATION (FDD pages 13–14)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, the State of Washington filed a lawsuit against Jersey Mike's Franchise Systems, Inc. on October 15, 2018. The lawsuit, filed through the Attorney General in the State of Washington King County Superior Court, also included Jersey Mike's franchisees owning restaurants in Washington as defendants. The case number is 18-2-25822-7.
The allegations in the lawsuit centered around the inclusion of a 'no-poach' provision in legacy franchise agreements. This provision restricted franchisees from soliciting or hiring current employees of Jersey Mike's or other franchisees. Prior to the filing, Jersey Mike's had already announced they would not enforce the provision and had removed it from their standard franchise agreement. They also amended all franchise agreements for restaurants in Washington.
To resolve the dispute, Jersey Mike's and the State of Washington entered into an Assurance of Discontinuance on August 23, 2019. This agreement required Jersey Mike's to continue its franchising practice without including the 'no-poach' provision in future agreements and to refrain from enforcing it in existing agreements. Additionally, Jersey Mike's agreed to pay the State of Washington $150,000 without admitting any fact, liability, misconduct, or wrongdoing.
This type of legal action regarding 'no-poach' provisions has become more common in franchising, as regulators and attorneys general scrutinize potential restraints on employee mobility. For a prospective franchisee, this litigation highlights the importance of understanding the legal and regulatory landscape related to employment practices and the potential for franchisors to face legal challenges that could impact the franchise system.