On April 3, 2018, the Antitrust Division filed a civil antitrust lawsuit against Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp. (“Wabtec”), simultaneously filing a civil settlement. The complaint alleges that these companies and a third company, Faiveley, have already entered into naked no-poaching agreements from 2009 that will last until at least 2015, in violation of Section 1 of the Sherman Act. 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 Justice Department launched its first civil enforcement action in 2018 against two of the world`s largest rail equipment suppliers, competing with each other “to attract, hire and retain a variety of skilled employees.” The complaint alleged that the companies had entered into an illegal no-poaching agreement between themselves and, later, with a third supplier of railway equipment. In the settlement agreement, the Department of Justice clarified that it considered non-poaching agreements to be inherent violations of antitrust law, even if there was no actual anti-competitive harm. A second charge is that SCA and a “company B” were also involved in similar illegal activities. For example, the indictment states that an SCA hiring manager sent an email to a recruiter that Company A and Company B are “taboo to SCA.” The non-poaching agreement is stated as follows: “[…] We can recruit junior staff (under management), but our agreement is that we would only talk to executives if they have already told their boss that they want to leave and are looking for it.
An email from an SCA hiring manager to a candidate is cited as stating that SCA cannot recruit into Company B “unless candidates have received explicit permission from their employers that they may be considered for employment with us.” It added that the application of antitrust law in labour law can be complicated; Some employment agreements and information exchange are legal, while others violate antitrust laws. Managers may face difficult questions about hiring practices that are against the law if they are not properly informed. After years of apprehension, the judiciary kept its promise to continue the “non-poaching agreements” and July 7. January 2021 announced that a grand jury has reached Surgical Care Affiliates LLC (SCA), a unit of UnitedHealth Group, over an alleged agreement with two other anonymous healthcare companies so as not to debauch the senior executives of each company. In addition to issuing the Department of Justice and FTC antitrust guidelines for human resources professionals, the division has filed expressions of interest in private antitrust cases pending in various federal district courts. As part of the department`s expanded Amicus program, the U.S. filed expressions of interest to further explain how Section 1 of the Sherman Act applies to agreements between employers, not to competition for employees. The Competition Impact Statement, submitted at the same time as the complaint, explains that these non-poaching agreements are in themselves considered illegal market-sharing agreements under Section 1 of the Sherman Act.
In the labour markets at issue, the agreements eliminated competition in the same irremediable way as the agreements for the fixing of product prices or the allocation of customers and were not reasonably necessary for cooperation between undertakings. These non-poaching agreements have distorted competition to the detriment of workers by depriving them of the opportunity to negotiate better employment opportunities and employment conditions. 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. Non-poaching agreements refer to illegal transactions between competitors in order not to hire or prosecute each other`s employees. Such agreements can range from informal verbal agreements to written commitments to avoid contacting a competitor`s employees. Antitrust authorities first took the position in 2016 that the DOJ would pursue non-poaching agreements and other forms of labor market collusion when the DOJ and FTC issued joint guidelines for HR professionals on applying federal antitrust laws to hiring practices and certain employment contracts. The agencies strongly warned the business community: “In the future, the Ministry of Justice intends to take criminal action against the fixing of bare wages or non-poaching agreements.” Wage setting, a form of pricing, involves agreements between companies to set wages at a certain level or range, while a non-poaching agreement is an agreement between companies not to recruit each other`s employees.
Companies are training HR practitioners in anti-poaching laws to ensure compliance, according to Ann O`Brien, a partner at BakerHostetler, who advises companies facing civil antitrust proceedings. As evidence of the alleged deals, the Justice Department indictment cites emails between SCA and the anonymous co-conspirators, including, for example, an email in which the CEO of a co-conspirator sent an email to his employees: “I had a conversation with [SCA`s CEO] about the people and we agreed that we would not approach proactively.” Another email from a co-conspirator to the CEO of SCA states, “I just wanted to let you know that [the recruitment company] is reaching out to a few of our executives.