Goodwin Insights January 07, 2019

The US Antitrust Agencies Continue to Hunt “No Poach” Agreements Between Employers

In 2016, the antitrust agencies issued a joint policy statement, “Antitrust Guidelines for Human Resources Professionals,” stating that agreements between companies not to poach each other’s employees or to fix employees’ wages violate antitrust laws.

Since then, both the FTC and DOJ have brought enforcement actions. The FTC’s Director of the Bureau of Competition has noted that “[j]ust as it is illegal for competitors to agree to fix prices on the products they sell in order to drive prices up, it is illegal for competitors to agree to fix wages or fees paid to workers in order to drive wages down.” The DOJ, for its part, has already brought an action against companies with “naked no-poach agreements” that restricted competition for US rail industry workers in violation of Section 1 of the Sherman Act, and more such actions are anticipated.

“No poach” and wage-fixing agreements also have received attention from members of Congress, including Senators Cory Booker (D-NJ) and Elizabeth Warren (D-MA), who recently sent letters to various franchise CEOs expressing concern about the use of no-poaching agreements with their employees. State attorneys general have also taken action against conspiring employers.

Companies should advise their human resources personnel not only on avoiding “no poach” agreements, but also on the importance of not sharing or accepting competitively sensitive wage, bonus, and benefit information that could be used to fix wages. Goodwin can provide simple and straightforward guidance to be certain your operations are compliant.