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No-Poachers Beware: the DOJ and Class Action Plaintiffs Turn Attention to No-Hire Agreements

By Lindsey R. Vaala and David C. Smith

Companies that engage in “no poach” agreements with competing employers do so at their peril. Following the October 2016 release of the DOJ/FTC Antitrust Guidance for Human Resources Professionals (“HR Guidelines”) making clear that “no-poach” or “mutual no-hire” agreements would be a focus of enforcement going forward, the DOJ has made good on the promise to bring new enforcement actions in this area. Most recent among these is a DOJ civil settlement announced earlier this month against some of the world’s largest rail suppliers. Imminently after the DOJ enforcement action and settlement was announced, a succession of class action complaints was filed on behalf of current and former employees of the target companies. While the DOJ’s enforcement efforts have so far been limited to civil procedings, there is every reason to expect that criminal prosecutions are forthcoming.

Antitrust in Employment: How Did We Get Here?

Antitrust enforcement in the employment space may seem like an unexpected focus for regulatory pursuit; it appears scrutiny in this area has caught some companies off-guard. Employment does not jump to mind as a typical market ripe for anticompetitive activity and Human Resources (“HR”) personnel may not be on a company’s radar screen as needing antitrust training. Yet the enforcement emphasis on competitive hiring is neither out of the blue nor inconsistent with traditional antitrust enforcement principles. Read the full article here.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.