McDonald's USA, LLC, et al. v. Leinani Deslandes, et al.

“The rule of reason is the accepted standard for testing whether a practice restrains trade in violation” of the Sherman Act. Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 885 (2007). Only in limited circumstances, where restraints “‘always or almost always tend to restrict competition and decrease output,’” has this Court endorsed per se rules. Id. at 886. In the decision below, the Seventh Circuit held that a time-limited intrabrand hiring restraint in McDonald’s franchise agreements was presumptively subject to per se scrutiny, even though no court has previously condemned such an agreement. The Seventh Circuit further concluded that “careful economic analysis” was needed to confirm per se treatment, while prohibiting consideration of the restraint’s procompetitive impact on other markets— e.g., its impact on the market for “burgers and fries.” The questions presented are: (1) Whether intrabrand hiring restraints are presumptively subject to per se Sherman Act analysis whenever they have a horizontal component; and (2) whether courts assessing a restraint under the Sherman Act must ignore procompetitive effects in related markets.