ATTORNEY GENERAL RAOUL ANNOUNCES AGREEMENT TO END INTERNATIONAL STAFFING COMPANY’S ANTICOMPETITIVE PRACTICES
Sodexo Agrees to End Practice of Preventing Employees from Being Hired by Competitors
Chicago — Attorney General Kwame Raoul announced a settlement agreement with Sodexo Inc. (Sodexo) under which the company agrees to end its use of “no-hire” clauses in contracts with clients. The clauses ultimately restricted the rights of Sodexo’s employees, without their knowledge, to seek employment beyond Sodexo.
Sodexo is an international staffing firm that provides food, catering and facilities management services to a variety of businesses, such as schools and hospitals. According to the Attorney General’s office, Sodexo’s contracts with several entities in Illinois contained no-hire clauses designed to prevent Sodexo’s salaried employees from seeking employment with competitor staffing agencies. Raoul’s office alleges Sodexo did not notify its employees that the company had negotiated contracts that restricted their rights. Under the agreement, Sodexo will cease “In attempting to hamstring its competition, Sodexo negotiated contracts with clients that violated the rights of its employees to seek employment outside the company,” Raoul said. “All workers have a right to pursue opportunities for advancement, and I am committed to holding employers accountable for unlawful practices that infringe on those rights.”
The Attorney General’s office opened an investigation after speaking with former Sodexo employees who lost their jobs working at one of Sodexo’s client businesses after the business replaced Sodexo with another staffing firm. Raoul’s office alleges that salaried employees who attempted to retain their jobs through the new staffing firm were informed that the client business’ previous contract with Sodexo prevented the employees from being hired by the new staffing firm. In other words, Sodexo’s salaried employees working at a hospital would be prevented from remaining in their positions if the hospital contracted with a staffing agency other than Sodexo – unbeknownst to those employees. Raoul’s office found that Sodexo’s practice of restricting employees’ outside employment opportunities violates Illinois law. Sodexo denies any wrongdoing.
The settlement Attorney General Raoul’s office negotiated requires Sodexo to take the following actions:
A Sodexo representative provided the following statement on the agreement:
“Sodexo was pleased to come to an agreement with the Illinois Attorney General’s office on best practices when contracting with clients. Sodexo commends Attorney General Raoul on his commitment to Illinois workers and remains committed to providing a safe, open and inclusive workplace to employees, while offering meaningful wages, benefits and resources.”
The settlement builds on Attorney General Raoul’s efforts to advocate for workers and fight unlawful employment practices, such as those that restrict employees’ rights and opportunities. For example, in July 2020, Raoul filed a lawsuit in Cook County Circuit Court, alleging that several staffing agencies and their client conspired to eliminate competition and harm temporary workers in Illinois by interfering with their ability to seek better employment opportunities and better wages and benefits. In order to better protect Illinois workers from wage theft and other unlawful employment practices, Attorney General Raoul in 2020 formally established the Workplace Rights Bureau within the Attorney General’s office via state statute.
Attorney General Raoul encourages workers who have concerns about wage and hour violations or potentially unsafe working conditions to call his office’s Workplace Rights Hotline at 1-844-740-5076 or visit the Attorney General’s website.
Bureau Chief Alvar Ayala and Deputy Bureau Chief Lydia Colunga-Merchant handled the case for Raoul’s Workplace Rights Bureau.