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Paul LLP Files Against H&R Block for Antitrust Violations

Paul LLP, along with Hartley LLP in San Diego, California, have filed an antitrust class action on behalf of individuals who work or have worked for H&R Block, a tax preparation services company and franchisor, for unlawfully conspiring to suppress the wages of its employees through agreements with its franchisees not to compete for workers in violation of Section I of the Sherman Act.

Plaintiff alleges that H&R Block orchestrated and enforced this conspiracy at least in part through an explicit contractual prohibition (“No-Poach Clause”) contained in standard H&R Block franchise agreements that severely limited Plaintiff’s and Class members’ job mobility and served to significantly suppress their compensation. With suppressed competition, of course, comes suppressed wages. H&R Block employed more than 70,000 workers at the height of 2018 tax season, with franchise locations employing as many as 30,000 more.

The specialized nature of H&R Block’s business—which requires thousands of seasonal workers who’ve undergone extensive, company-specific training—should lead to a “robust” competition for qualified workers. Instead, as alleged in the complaint, the company’s anticompetitive conduct kept wages low: H&R Block’s seasonal tax preparers earn, on average, $10.86 per hour, while the Bureau of Labor Statistics lists an average hourly wage of $22.67 for tax preparers, according to the lawsuit.

The case was filed in the Western District of Missouri and the Complaint can be viewed HERE.

News about the litigation

Bloomberg News: H&R Block’s No-Poach Contracts Were Anticompetitive: Lawsuit

Kansas City Star: H&R Block’s ‘No-Poach’ Hiring Practices Under Fire From Lawsuit, State Investigation

Top Class Actions: 

H&R Block Tax Preparer Wages Suppressed by No Poach Agreement, Say Employees