U.S. Antitrust Enforcers Actively Targeting Agreements Between Competitors In Employment Markets That Restrict Competition For Employees

The United States' chief antitrust enforcer recently reiterated his office is serious about curtailing employee wage-fixing and no-poaching agreements.1 He also strongly suggested the Department of Justice is investigating and preparing criminal cases against numerous entities suspected of engaging in such misconduct. While the government has warned the public repeatedly of its elevated interest on the topic, some corporations are failing to take the warning seriously or failing to comprehend that agreements on hiring, compensation, and/or retention among entities that compete for employees - even if the entities do not "compete" for sales of services or goods - can violate the antitrust laws. Because nearly all companies compete at some level for employees, they need to clearly understand how they compete with other businesses for employees and the steps they can take to avoid conduct that could be construed as restricting competition for those employees.

DOJ/FTC Policy Guidance. In late 2016, the Department of Justice ("DOJ") and the Federal Trade Commission ("FTC") jointly issued a policy statement entitled "Antitrust Guidance for Human Resources Professionals."2 Pursuant to the Guidance, the federal government's primary competition regulators have begun to treat agreements among businesses not to compete regarding new or existing hires as potential criminal offenses. As a result, among other corporate and individual sanctions, jail time now is in play for corporate representatives who engage in naked employee wage-fixing or no-poaching arrangements with competitors.3 Moreover, the Guidance takes an expansive view of what it means to compete and to be a competitor. Since the relevant offense involves competition in the markets for employees, companies that do not compete against each other in the traditional sense of selling goods or services still can be subject to criminal prosecution when they eliminate competition for employees.4

Acting AAG's Support for the Guidance. In September 2017, Acting Assistant Attorney General ("AAG") Andrew Finch, left no doubt that the Trump Administration would carry forward the Guidance initiated under the Obama Administration. In his remarks at a symposium in Washington, D.C., the acting AAG discussed the Antitrust Division's continuing commitment to the Guidance. His remarks reiterated that businesses need to be aware that the anticompetitive behavior targeted by the Guidance is not agreements between...