PAY ME MY MONEY DOWN: AN UPDATE ON WAGE FIXING AND NO-POACH AGREEMENTS UNDER THE US SHERMAN ACT
In April 2022, the Department of Justice’s (DOJ’s) antitrust division suffered back-to-back losses in two separate attempts to expand criminal antitrust liability to wage fixing and so-called ‘no-poach’ agreements. On 14 April 2022, a Texas jury returned an acquittal of two employees of a medical staffing company who were charged with entering an illegal agreement to fix the wages of their respective companies’ employees.
The following day, a Colorado jury acquitted a medical company and its former chief executive on antitrust charges that they entered into illegal agreements with their competitors not to hire each other’s employees. The acquittals capped a years-long effort by the antitrust division to affect a policy shift in antitrust law to criminalise labour market agreements. But after its losing streak, will the DOJ continue to advocate for an expansion of the law?
What are no-poach agreements?
A no-poach agreement (sometimes called a non-solicit or no-hire agreement) is an agreement between two or more companies not to hire the employees of the other company or companies. In contrast, a wage-fixing agreement is an agreement between two or more companies regarding the amount of compensation paid to certain employees or categories of employees. The US government has taken the position that ‘naked’ no-poach agreements – agreements that are not reasonably ancillary to a legitimate business agreement between the companies – are per se unlawful under the Sherman Act antitrust law.
Jul-Sep 2022 Issue
Thompson Hine