Antitrust

6 2 The HR Guidance boldly claimed that 'naked' no-poach agreements will be treated as per se violations of the antitrust laws. That is, the Antitrust Agencies will not consider any possible pro-competitive benefits of such an agreement and the DOJ will consider the imposition of criminal liability. The HR Guidance also recognized, however, that some no-poach agreements may not be unlawful at all. "Legitimate joint ventures…are not considered per se illegal under the antitrust laws," so a non- solicitation or no-poach agreement that is reasonably necessary for a legitimate collaboration will be viewed holistically. The open question is where the Antitrust Agencies and the courts will draw the line between these two extremes. WHAT IS A NO-POACH AGREEMENT? A no-poach agreement is an agreement to restrain from cold calling, soliciting, recruiting, hiring or otherwise competing for employees. A no-poach agreement can be oral or written, and often will be contained in a variety of common commercial contracts. Of course, the scope of the non-solicitation provision will be a critical issue of importance — whether oral or written. ANTITRUST AGENCIES' GUIDANCE The HR Guidance specifically highlighted both naked anti-poaching provisions, in which companies agree not to recruit each other's employees, as well as wage- fixing provisions, in which companies agree on salary or other terms of compensation. Antitrust Agencies will examine any written terms that exist, but also may examine an employer's hiring practices, communications and parallel behavior to decide whether a no-poach agreement can be inferred. It is important to note that companies do not have to compete in the sale of the same goods and services to be considered direct 'competitors' for purposes of any no-poach analysis. Indeed, Antitrust Agencies have taken a broad view in defining competitors when it comes to these types of agreements. Firms that compete to hire or retain employees are considered direct competitors in the labor marketplace. ANTITRUST AGENCIES' ARE INCREASING ENFORCEMENT AGAINST NO-POACH AGREEMENTS In light of the October 2016 HR Guidance, it should be no surprise that no-poach agreements have become an enforcement priority. The Antitrust Agencies' first no-poach case following the HR Guidance was filed in April 2018. In that case, the DOJ alleged that two railroad equipment supply companies, through communications between company executives, agreed not to solicit or poach one another's employees. In a broad consent decree, the DOJ extended its scope to include both employees located in the United States hired to work domestically or internationally, CARTELS 11 T H E D O J V I E W S I T S E N F O R C E M E N T A U T H O R I T Y T O E X T E N D T O N O - P O A C H A G R E E M E N T S B E T W E E N A L L E M P L O Y E R S W I T H A N Y C O N N E C T I O N T O T H E U N I T E D S T A T E S No-Poach Agreements Raise Issues for Companies with Employees in the United States

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