Non-poaching agreements are void if they are not reasonably necessary for separate and legitimate business cooperation between employers. No-bonus and wage-setting agreements are in themselves illegal because they eliminate competition in the same irremediable way as agreements to fix product prices or distribute customers. The United States asked the court to apply the rule itself if it concluded that Duke and UNC had entered into a naked no-poaching agreement. He also argued that, based on the allegations contained in the operational complaint, the court should not conclude that the defendant Duke University was granted immunity from antitrust liability if the court concludes that it entered into an unlawful agreement in violation of Section 1 of the Sherman Act. Legal experts say the Biden administration`s increased action against non-poaching deals has put managers on alert. In recent years, there has been a remarkable trend against the applicability of anti-poaching agreements, a phenomenon once common in retail and hospitality. Anti-poaching agreements are generally defined as agreements between two or more companies so as not to compete for each other`s employees. This can be as simple as neighboring fast food franchisors who agree not to hire employees from each other for formal contracts between Silicon Valley tech giants. Anti-poaching agreements usually prevent parties from cold calling to apply for a job or hire employees from the other company. The ministry will continue to vigorously enforce antitrust laws in labour markets and educate lawyers, businesses and individuals on how antitrust laws are applied to hiring and compensation decisions.

In the spring of 2018, Senators Cory Booker (D-NJ) and Elizabeth Warren (D-Mass) introduced legislation called “The End Employer Collusion Act” to “prohibit agreements between employers that directly restrict an employee`s current or future employment.” Their bill explicitly identifies franchise agreements as targets of the legislation. In addition, senators sent letters to nearly 100 franchise CEOs from various industries urging them to stop entering into solicitation agreements and to request information about each company`s solicitation practices. As with all antitrust issues, businesses and individuals, whether large or small, for-profit or not-for-profit, should consider the prevention approach – the cure of books. To avoid the serious consequences of antitrust violations, companies and other organizations should implement effective compliance programs and regularly monitor their effectiveness. The Justice Department has released an update to its guidance on antitrust compliance programs for 2020, which states that its prosecutors should consider a number of factors in cases involving companies, including “the adequacy and effectiveness of the company`s compliance program at the time of the crime, as well as at the time of the indictment decision”. The effectiveness of a company`s compliance program is a factor that prosecutors must consider when deciding whether and to what extent criminal charges should be laid against a company. The government`s hostility to non-poaching agreements extends to state law enforcement. In early 2018, the Washington State Attorney General announced an agreement with seven fast food chains (including Arby`s, Carl`s Jr., McDonald`s and Jimmy John`s) requiring them to abandon or no longer apply non-poaching clauses in existing franchise agreements and not to include such clauses in future contracts. In July 2018, attorneys general of California, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York (whose law governs the ALS project), Oregon, Pennsylvania, Rhode Island and the District of Columbia announced an investigation into the non-poaching practices of other restaurant chains. In 2016, the DOJ and the Federal Trade Commission (FTC) issued guidelines for human resources professionals on how to avoid potential antitrust violations related to the use of non-poaching agreements.

The indictments show the DOJ`s commitment to pursuing collusion in the U.S. labor market, according to Makan Delrahim, deputy attorney general of the DOJ`s antitrust division. “In collaboration with our law enforcement partners, the [DEPARTMENT of Justice] will ensure that companies that illegally deprive their employees of competitive opportunities are not immune to our antitrust laws.” If you require assistance with regulatory compliance and other antitrust matters, please contact: Michael Kurs, James (Tim) Shearin or Jonathan Orleans at Pullman & Comley or our Practice Leads for Compliance and Risk Management Services, Collin Baron or Stephen Cowherd. If future or current employees sign a non-compete clause, they should always be offered compensation for agreeing to the terms. Indeed, by adhering to this type of clause, the employee effectively limits his ability to earn a living in his field of expertise. The DOJ`s antitrust division opened its first major non-poaching case in 2010 when it filed civil lawsuits against several Silicon Valley companies — including Lucasfilm, Pixar, Google, Apple, Adobe and Intel — for ordering hiring officials to enter into “no cold call” agreements in which companies agreed not to contact their employees and to notify each other. when they make an offer to one of their employees. The settlements cost the defendant companies more than $400 million. Few problems with restrictive alliances get Buzzworth status. However, when state and federal government agencies and class action lawyers file lawsuits nationwide and Fortune 500 companies from various industries start to set up and agree to change the way they do business, well, it usually generates buzz and attention. .