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An Update On Anti-Poach Enforcement And Class Actions

by Robin van der Meulen, Brian Morrison
Law 360 |
Robin van der Meulen and Brian Morrison analyze the recent investigations into no-poach agreements

In recent years, no-poach agreements have caught the attention of government regulators and are now subject to close scrutiny both by the U.S. Department of Justice’s Antitrust Division and private class action plaintiffs. A no-poach agreement is an agreement between two or more companies not to compete for each other’s employees, such as by not soliciting, interviewing or hiring them. Unlike many other types of anti-competitive conduct, which involve increasing the price of a good, the anti-competitive harm here occurs in the context of labor services, i.e., employees are injured through suppressed wages, fewer benefits and reduced opportunities for advancement. Recognizing the real and potentially large impact no-poach agreements can have on workers, in October 2016, the Antitrust Division issued guidance on the illegality of no-poach agreements, and announced that from that point onward, it intended to proceed criminally against naked no-poach and wage-fixing agreements.