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Lead Antitrust Attorney Hints At Upcoming Prosecutions For No-Poach Agreements

The chief prosecutor in the U.S. Department of Justice’s Antitrust Division signaled last week that his unit expects to initiate criminal actions against multiple companies accused of entering unlawful pacts not to hire each other’s employees.  Such action would fulfill earlier promises, by both the Trump and Obama Administrations, to treat employment-related antitrust violations with the same seriousness afforded to more traditional, consumer-based antitrust issues.

The public often thinks of price-fixing and other consumer-focused schemes as “traditional” antitrust violations.  However, it can be similarly unlawful for companies to form agreements that suppress the opportunities of employees. On October 20, 2016, the Department of Justice and Federal Trade Commission published Antitrust Guidance for Human Resource Professionals, cautioning employers that agreements with other companies to limit the wage rates of similar types of workers, or not hire each other’s workers, are unlawful and would be subject to criminal prosecution. Among other things, the Guidance cautions employers on sharing wage information under some circumstances.

Less than one month after the above-referenced guidance was issued, Donald Trump was elected President. Despite the change of Administration, the Antitrust Division has indicated that it fully intends to continue the charge against wage-fixing and no-poaching agreements.

On January 19, 2018, the lead attorney of the Antitrust Division, Makan Delrahim, discussed the Division’s position toward no-poaching agreements during a conference hosted by the Antitrust Research Foundation at George Mason University’s Antonin Scalia Law School. During the presentation, which Law 360 reported later that day, Mr. Delrahim told attendees that the Division would be initiating multiple criminal prosecutions “[i]n the coming couple of months[.]”  Not surprisingly, he did not share the names of any companies that the Division intended to charge in those actions.

The Antitrust Division’s interest in criminal prosecutions represents a continuation from the Obama Administration.  Nevertheless, Mr. Delrahim identified one way in which the Division intended to diverge from the prior Administration. Specifically, the Division intends to move away from consent agreements that implement behavioral remedies, and look more closely at structural remedies such as divestitures.  As Mr. Delrahim explained, behavioral remedies create a need for continuing administrative oversight.  Further, even with the additional oversight they still can be extremely difficult to enforce.  On the other hand, by requiring changes to a company’s corporate structure, the Division can reduce a company’s ability to violate antitrust law, with or without costly monitoring.

Jackson Lewis P.C. © 2019

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About this Author

Conrad Shawn Kee, e-Discovery Attorney, Jackson Lewis Law Firm
Shareholder

Conrad Shawn Kee in the Denver and Stamford offices of Jackson Lewis P.C.  Mr. Kee is a member of the firm’s e-Discovery and Workplace Technology Practice Group, the co-chair of the firm’s Trade Secret Protection and Non-Competition Practice Group, the director of the Jackson Lewis E-Discovery U™ program, and a member of the firm’s International Employment Issues and Corporate Governance and Internal Investigations Practice Groups.  Shawn was selected by peers and in-house counsel to be listed in Chambers USA Guide to America’s Leading Business Lawyers for several years.

(203) 961-0404
Clifford R. Atlas, Employment Litigation Attorney, Jackson Lewis, non-solicitation agreements lawyer
Principal

Clifford Atlas is a Principal in the New York City, New York, office of Jackson Lewis P.C. He is the Co-Leader of the Non-Competes and Protection Against Unfair Competition Practice Group.

Mr. Atlas works extensively with clients in developing and drafting employment contracts and restrictive covenant agreements, and developing programs to best protect clients’ confidential business information. He has significant experience in prosecuting as well as defending actions involving breach of non-competition and non-solicitation agreements, employee raiding, misappropriation of confidential information, tortious interference with contract, unfair competition, and related business claims. Mr. Atlas also has assisted clients in employment issues arising from corporate transactions.

212-545-4017
Colin Thakkar Non-Competes Unfair Competition attorney Jacksonville, FL  Jackson Lewis law firm
KM Attorney

Colin Thakkar is an Associate in the Jacksonville, Florida, office of Jackson Lewis P.C. Mr. Thakkar represents and counsels small and large businesses on all aspects of employment-related issues.

He has represented employers in federal and state disputes and litigation involving allegations of discrimination, wage and hour claims, ERISA claims, non-compete, non-solicitation, non-disclosure agreements and various employment-related common law claims. Mr. Thakkar also has significant experience representing and advising...

904-638-2655