United States District Court, E.D. Michigan, Southern Division
HARLEY BLANTON, on Behalf of Himself and All Others Similarly Situated, Plaintiff,
v.
DOMINO'S PIZZA FRANCHISING LLC, DOMINO'S PIZZA MASTER ISSUER LLC, DOMINO'S PIZZA LLC, and DOMINO'S PIZZA, INC., Defendants.
David
R. Grand Magistrate Judge.
OPINION AND ORDER DENYING DEFENDANTS' MOTION TO
DISMISS (DOC. #26)
Victoria A. Roberts United States District Judge
I.
INTRODUCTION
On
October 15, 2018, Harley Blanton, individually and as a
representative of similarly-situated persons, filed suit
against Defendants Domino's Pizza Franchising LLC,
Domino's Pizza Master Issuer LLC, Domino's Pizza LLC,
and Domino's Pizza, Inc. (collectively,
“Defendants”).
Blanton
says Defendants violated the Sherman Antitrust Act by
orchestrating an employee no-hire agreement among their
nationwide network of franchisees. Under the no-hire
provision at issue-included in every Domino's franchise
agreement from at least January 2013 to April
2018-Domino's franchisees agreed not to solicit or hire
current employees of other Domino's franchisees and
affiliated entities.
Blanton
alleges that this is a “horizontal” restraint of
trade that is sufficiently pled. Defendants disagree and move
to dismiss under Federal Rules of Civil Procedure 12(b)(1)
and 12(b)(6); they say that Blanton failed to sufficiently
allege injury and state a claim upon which relief can be
granted. Oral argument was heard on April 15, 2019.
The
Court finds that Blanton has sufficiently pled a horizontal
restraint of trade between franchisees at the same level. The
Court also finds that-contrary to what Defendants urge-it
need not now decide what standard of review will ultimately
govern once all facts become known.
Defendants'
motion to dismiss is DENIED.
II.
BACKGROUND
Blanton
worked for a Domino's franchise in Port Orange, Florida,
from January 2017 until April or May of that year; he says he
quit because his hours were repeatedly cut back. The
Domino's franchise that Blanton worked for is one of many
in the nation that signed the Domino's franchise
agreement and agreed to the no-hire provision.
Defendant
Domino's Pizza Franchising, LLC-the current franchising
arm of Defendant Domino's Pizza, Inc.-enters into a
standard franchise agreement with each new Domino's
franchise owner; Domino's franchises are independently
owned and operated as separate entities from Defendants.
Until
at least April of 2018, each franchise agreement included the
no-hire provision. The no-hire provision required franchisees
to agree not to:
Directly or indirectly, solicit or employ any person who is
employed by Domino's, by any entity controlled by or
affiliated with Domino's, or by any other of our
franchisees, nor will you induce any of these people to leave
their employment without the prior written consent of their
employers.
[Doc. No. 1, pp. 3].
This
provision prohibits a Domino's franchisee from recruiting
or hiring a current employee of another Domino's
franchisee without prior written consent. Franchisees also
agree that a violation of the no-hire provision will cause
“irreparable harm” to Defendants; moreover, a
violation triggers termination of the violating
franchisee's franchise agreement.
Blanton
says that Defendants used the franchise agreements to
orchestrate a conspiracy among their franchisees to not
compete for labor; Blanton says that the no-hire provision is
evidence of that conspiracy and violates the Sherman
Antitrust Act because it unreasonably restrains competition
for Domino's franchise employees and depresses employee
wages, lessens employee benefits, and stifles employee
mobility.
III.
STANDARD OF REVIEW
A
motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6) tests a complaint's legal sufficiency. Although
the federal rules only require that a complaint contain a
“short and plain statement of the claim showing that
the pleader is entitled to relief, ” see Rule 8(a)(2),
the statement of the claim must be plausible. Indeed,
“[t]o survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is plausible where the facts
allow the Court to infer that the defendant is liable for the
misconduct alleged. Id. This requires more than
“bare assertions of legal conclusions”; a
plaintiff must provide the “grounds” of his or
her “entitlement to relief.” League of United
Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th
Cir. 2007).
In
deciding a motion under Rule 12(b)(6), the Court must
construe the complaint in the light most favorable to the
plaintiff and accept as true all well-pled factual
allegations. Id. The Court “may consider the
Complaint and any exhibits attached thereto, public records,
items appearing in the record of the case and exhibits
attached to defendant's motion to dismiss so long as they
are referred to in the Complaint and are central to the
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