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Agreement Not To Hire Employees

The complaint by former employees of the companies involved highlighted the practice of some key players in the technology industry, who claimed to be cooperating to agree not to separate employees from each other. The workers concerned had argued that such agreements restricted their ability to promote in the sector and stifled their attempts to obtain higher wages. No-poach agreements can encompass everything from broad non-compliance agreements to less restrictive agreements, such as. B promises not to call each other too coldly (or to work with headhunters who hire employees) or even the awarding of job fairs between competing employers. A. YES. Agreements between companies to not compete with the same group of employees can easily violate federal and regional cartel laws and be prosecuted as crimes. U.S. antitrust authorities, the Federal Trade Commission and the U.S. Department of Justice have issued a common antitrust policy for human resources professionals to pay more attention to the government`s enforcement policy in this area. According to the agencies, on April 3, 2018, the Cartel Department filed a complaint of cartels and abuse of dominance against Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp. (“Wabtec”), along with a civil transaction. The complaint accuses these companies and a third-party company, Faiveley, of nude non-poach agreements that began as early as 2009 and last until at least 2015, in violation of Section 1 of the Sherman Act.

A. A non-poach agreement is essentially an agreement between two companies not to compete with each other`s employees, for example. B by not soliciting them or hiring them. Agreements between companies that otherwise limit or set the terms and conditions of employment of current or potential workers may violate the rules on cartels and abuse of dominance if the agreement limits the company`s independent decision-making on wages, wages, benefits, terms of employment or employment opportunities. An agreement or agreement between two companies not to compete with potential employees is a classic no-poach agreement. Such agreements may be contrary to the Sherman Act, even if they are informal or unwritten. Even if there is no oral or written agreement, other circumstances – such as evidence of discussions, sharing of wage information or parallel behaviour – may be evidence of an illegal implicit agreement. The competition impact statement, filed at the same time as the complaint, explains that these non-poach agreements are in themselves considered unlawful contracting agreements under Section 1 of the Sherman Act.

In the relevant labour markets, the agreements eliminated competition in the same irretrievably as product pricing or customer allocation agreements, and were not reasonably necessary for cooperation between firms. These non-poach agreements have distorted competition to the detriment of workers by depriving them of the opportunity to negotiate better employment opportunities and conditions of employment. A. The legality of any non-poach agreement must be assessed on the basis of the specific and often clear facts of each situation. Do not assume that a no-poach agreement, because it was considered “incidental” in a case, will also be considered incidental in various circumstances. These analyses are entrusted to the cartel`s most experienced lawyers. A: Yes. For example, in 2007, the DOJ sued the Arizona Hospital and Healthcare Association for illegally implementing a uniform rate plan for temporary nurses for AzHHA member hospitals. In 2010, DOJ decided with Adobe, Apple, Google, Intel, Intuit and Pixar to illegally accept non-poach agreements. Following a private class action for more than $600 million. In all cases, companies should avoid entering into agreements or agreements with other companies about their current or potential employees without first seeking the advice of an experienced cartel advisor.

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