Chapter IV Joint Ventures

• Pages: 103-106

CHAPTER IV

JOINT VENTURES

In Arrington v. Burger King Worldwide, Inc.,1 the Eleventh Circuit

held that the plaintiff restaurant employees plausibly alleged concerted

action among Burger King and its franchisees based on a “No-Hire

Agreement” contained in Burger King franchise agreements.2 Defendants

argued that Burger King and its franchisees “constituted a single econo mic

enterprise,” and the district court agreed and dismissed the plaintiffs’

Section 1 claim.3 The Eleventh Circuit applied American Needle4 and

reversed, holding that the relevant inquiry was “whether the decision . . .

in question involve[s] concerted action.”5 The court held that requirement

was satisfied because the plaintiffs alleged that the franchisees “each

separately pursue their own economic interests when hiring employees.”6

General Principles Governing Collateral Restraints among Joint

Venture Members

In Snow v. Align Technology, Inc.,7 the district court held that an

alleged agreement between two suppliers of dental aligners was plausibly

alleged to be a naked restraint rather than an ancillary restraint.8 The court

stated that, to be an ancillary restraint, a restraint had to be: (i) “subordinate

and collateral to a separate, legitimate” procompetitive transaction; and

(ii) “reasonably necessary” to accomplish the transaction’s procompetitive

1. 47 F.4th 1247 (11th Cir. 2022).

2. Id. at 1250.

3. Id. at 1253.

4. Am. Needle, Inc. v. Nat’l Football League, 560 U.S. 183 (2010).

5. 47 F.4th at 1255.

6. Id. at 1256.

7. 586 F.Supp. 3d 972 (N.D. Cal. 2022).

8. Id. at 972.