In October 2016, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice issued formal guidance for human resource (HR) professionals and others who are involved in hiring and compensation decisions. As the FTC put it, “HR professionals are often in the best position to ensure their companies’ hiring practices comply with the law and this guidance will help educate and inform them about how the antitrust laws apply to the employment arena.”
Workers are entitled to the benefits of a competitive market for their services. They are harmed if companies that would ordinarily compete against each other to recruit and retain employees agree to fix wages or other terms of employment or enter into so-called “no-poaching” agreements by agreeing not to recruit each other’s employees.
Going forward, the Justice Department intends to criminally investigate naked no-poaching or wage-fixing agreements that are unrelated or unnecessary to a larger legitimate collaboration between the employers. These types of agreements eliminate competition in the same irredeemable way as agreements to fix the prices of goods or allocate customers, which have traditionally been criminally investigated and prosecuted as hardcore cartel conduct. Agreements that do not constitute criminal violations may still lead to civil liability under statutes enforced by both agencies.
“Competition is essential to well-functioning markets, and job markets are no exception,” said FTC Chairwoman Edith Ramirez. “These guidelines will help ensure that employers understand how to comply with the antitrust laws and will help employees reap the benefits of a competitive market for their services.”
You can read or download a copy of the Antitrust Guidance for Human Resource Professionals document. If you have any questions, you are invited to contact Lieff Cabraser partner Dean M. Harvey.
About Lieff Cabraser’s Antitrust Practice Group
Lieff Cabraser is at the forefront of innovative and landmark cases promoting fair competition in the marketplace. We assist companies, governments, and consumers affected by anticompetitive conduct, assess market circumstances and determine whether and how to pursue legal action to achieve their goals. Learn more about our Antitrust & Intellectual Property Law Practice Group.