January 24, 2024

Antitrust is a Bust – Employer to Pay $7.4M in DOJ’s No Poach Approach

Plaintiffs announced that they have reached a classwide settlement with one of multiple defendant employers to the tune of $7.4M for their anticompetitive conduct.

How’s that? The basis of the lawsuit alleges the defendant-employers, “entered into a conspiracy not to solicit, recruit, hire without prior approval, or otherwise compete for employees, including engineers and other skilled employees.”

So, what? The alleged impact is the “conspiracy disrupted the efficient allocation of labor that would have resulted if Defendants had competed for, rather than colluded against, their current and prospective employees…[and] also restricted their employees’ mobility to access better job opportunities.”

Who knew? Well, I think all employers are supposed to. Here is just one of several articles I’ve written on this issue. Even the lawsuit explains, “In October 2016…DOJ’s Antitrust Division and the Federal Trade Commission issued an Antitrust Guidance For Human Resource Professionals (the “Guidance”)…DOJ alerted HR professionals and others involved in hiring and compensation decisions that ‘[a]n agreement among competing employers to limit or fix the terms of employment for potential hires may violate the antitrust laws if the agreement constrains individual firm decision-making with regard to wages, salaries, or benefits; term of employment; or even job opportunities’…The Guidance specifically called out the illegality of no-poach agreements: ‘An individual likely is breaking the antitrust laws if he or she . . . . Agrees with individual(s) at another company to refuse to solicit or hire that other company’s employees (so-called ‘no poaching’ agreements).’”

What’s an employer to do? Review any contracts you have with vendors, contractors, and subcontractors. Look for any terms, limits or restrictions about soliciting or hiring one another’s employees. If you find any, have had them reviewed by your company’s employment counsel.