August 08, 2025|Publications
August 8, 2025 | U.S. District Court, District of Nevada | Unpublished Opinion
Executive Summary
In an unpublished decision, Chief Judge Miranda M. Du of the District of Nevada refused to dismiss antitrust claims alleging wage-fixing and no-poach agreements among members of a regional ranching association. While the case arose in the agricultural context, the court’s reasoning offers important lessons for franchisors and franchisees. Courts are increasingly cautious when reviewing association rules or system-wide practices that may affect wages or employee mobility, and they have shown reluctance to accept defenses that a system operates as a “single entity” or is insulated by regulation.
For franchisors, the ruling illustrates how courts may analyze system-wide wage or hiring restrictions as horizontal agreements among independent businesses. For franchisees, particularly those active in regional associations, the opinion underscores the need for caution when discussing or aligning on employee pay or hiring practices. Against this backdrop, the court concluded that the plaintiff plausibly alleged per se unlawful restraints under the Sherman Act and rejected a range of statutory and regulatory immunity arguments.
Relevant Background
Plaintiff Cirilo Ucharima Alvarado, a Peruvian citizen, worked as a sheepherder in Nevada through the H-2A temporary guest worker program. The program allows U.S. agricultural employers to recruit foreign workers when domestic labor is unavailable, but it requires employers to pay at least the Department of Labor’s “Adverse Effect Wage Rate” (AEWR) or other higher applicable minimums.
Western Range Association (“WRA”), a nonprofit association of sheep ranches, acted as the central vehicle for recruiting and placing workers on behalf of its members. WRA submitted job orders, coordinated H-2A applications, and allocated workers across ranches. Plaintiff alleged that this centralized structure allowed WRA to standardize wages and restrict transfers, turning what might otherwise be administrative coordination into an anticompetitive agreement.
The complaint highlighted several mechanisms said to enforce this arrangement: membership agreements requiring compliance with WRA’s rules, lists of available workers distributed centrally by WRA rather than allowing open recruiting, employment attestations restricting workers from transferring, and longstanding “no-poach” rules that threatened fines or expulsion for members who solicited each other’s employees. Earlier complaints were dismissed against individual ranches because they did not show member assent to these policies. The Third Amended Complaint added allegations showing how each ranch joined WRA, what rules they agreed to, and how transfers and wage practices were administered across the association.
With those new facts, plaintiff sought to revive claims not only against WRA but also against eight individual member ranches. In turn, WRA and the ranch defendants filed a new round of motions to dismiss. They argued that the association and its members should be treated as a single entity under the Supreme Court’s Copperweld doctrine, that they were immune as an agricultural organization under Section 6 of the Clayton Act, and that the regulatory structure of the H-2A visa program created implied immunity from antitrust laws. They also contended that the complaint still failed to plead sufficient facts to show each ranch’s assent to an unlawful agreement.
Decision
The court denied all motions to dismiss, holding that the plaintiff had adequately pled Sherman Act claims against both WRA and its member ranches.
First, the court rejected the defendants’ arguments for antitrust immunity. WRA could not invoke Copperweld’s single-entity doctrine because its members are independent businesses with separate economic interests. As the court explained, “WRA is made up of a constellation of member ranches which have no ‘unity of interest’ to parallel a parent and its subsidiary.” Instead, “[l]ike in American Needle, each of WRA’s members is a substantial, independently owned, independently managed business with a separate corporate consciousness and separate measures of success not necessarily aligned with other ranches operating in the same market.” The court likewise found that Section 6 of the Clayton Act and the Capper-Volstead Act did not shield agreements that manipulated labor markets, observing that “the central allegations do not relate to collective processing, preparation, or marketing of products, but rather to manipulation of the labor market by separately-owned competitors.” Finally, the court refused to find implied immunity, emphasizing that “there is no government policy requiring (or even permitting) applicants to collude to fix wages at the floor…nor does the DOL actively supervise Defendants’ interactions with its members.”
Second, the court held that the plaintiff plausibly alleged anticompetitive restraints. It described wage-fixing and no-poach agreements as “archetypally anticompetitive horizontal restraints,” the sort of conduct that courts routinely treat as per se unlawful. The court noted that “[h]orizontal price-fixing conspiracies traditionally have been, and remain, the archetypal example of a per se unlawful restraint on trade.” Even if the regulatory backdrop of the H-2A program could justify a fuller rule-of-reason inquiry, the allegations were sufficient to state claims under either approach.
Finally, the court found that the plaintiff had cured earlier pleading deficiencies as to the ranch defendants. Earlier versions of the complaint failed to show each ranch’s assent to the alleged conspiracy. The Third Amended Complaint, by contrast, alleged membership applications requiring ranches to “cede their authority to set wages and to hire workers to the Association,” bylaws warning that “pirating labor” could lead to expulsion, and job orders reflecting wages set at the Department of Labor floor. In the court’s words, those allegations went beyond “mere membership” in a trade association and plausibly suggested “knowing collusion.”
Looking Forward
In a world where predatory plaintiff’s attorneys are looking for any vehicle to expand the number of pockets to illicitly pick, this case provides valuable lessons for franchisors and franchisees—even though it involved sheep ranches rather than franchise restaurants.
For franchisors, the decision is a reminder that courts are paying close attention to wage-fixing and no-poach practices, even in industries subject to heavy regulation. Centralized hiring and placement systems, like the one alleged here, may attract scrutiny if they are structured in ways that appear to limit independent operators’ discretion over wages or mobility. Franchisors that provide recruiting support or applicant portals should take care to design them so they cannot be construed as vehicles for coordinating franchisee wage-setting or hiring decisions.
For franchisees, particularly those involved in regional associations, the opinion illustrates how even informal collaboration can be recast as collusion. Discussions about wages, shared understandings about hiring, or association rules that discourage “poaching” from one another may seem harmless in the moment, but courts may view them as unlawful restraints on competition. The lesson is not that franchisee associations cannot function, but that they must avoid topics that touch directly on employee pay or transfer restrictions.
Although the factual setting may feel remote, the underlying themes are anything but. What began as a dispute over the wages of sheepherders in Nevada demonstrates how aggressively courts will police agreements that restrict competition in labor markets. For those operating in franchising, the takeaway is that cases from unlikely industries can still shape the legal risks that touch the day-to-day realities of franchise systems.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
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