Deslandes v. McDonald's: No-Poach Agreements and the Rule of Reason Daniel Sweat

Abstract

In 2023, Judge Easterbrook held that an antitrust plaintiff’s claim can be evaluated under the rule of reason despite an ancillary restraints defense from the defendant. Deslandes v. McDonald’s thereby directly contradicted Polk Bros., Inc. v. Forest City Enters., which for decades stood for precisely the opposite proposition. In an environment of increased scrutiny from antitrust enforcers and uncertainty about the future of antitrust labor law, Deslandes only further muddied the waters. Clarity, however, lies in an analysis of the history and purposes underlying the ancillary restraints doctrine.

This Note argues that ancillary no-poach agreements—those between purchasers in a labor market that are reasonably necessary to accomplish the purpose of a broader, non-pretextual agreement—are properly analyzed under the rule of reason. Part I examines the standards of antitrust adjudication—per se, rule of reason, and quick look—and the historical development of the ancillary restraints doctrine. Part II catalogues the regulatory actions of state and federal antitrust enforcers who have applied increased scrutiny to labor market restraints in recent years. Against that backdrop, Part II then explains the arguments at play in Deslandes v. McDonald’s and why Easterbrook’s ruling in that case poses a problem for antitrust practitioners. Part III critiques Easterbrook’s ruling by arguing that ancillary restraints like those in Deslandes warrant analysis under the rule of reason, not the per se standard.