Antitrust & Intellectual Property

Knorr and Wabtec Employee Illegal No-Poach Agreements

On April 3, 2018, the United States Department of Justice filed a complaint against Knorr-Bremse AG and Westinghouse Air Brake Technologies Corporation (Wabtec), two of the world’s largest rail equipment suppliers, regarding unlawful agreements between them not to compete for each other’s employees. The complaint also names rail equipment maker Faiveley Transport S.A., regarding misconduct Faiveley engaged in prior to being acquired by Wabtec in November 2016.

The DOJ challenges three specific agreements. First, the DOJ alleges that, beginning no later than 2009, Knorr and Wabtec agreed not to recruit or hire without prior approval employees of each other. For instance, in a letter dated January 28, 2009, a director of Knorr Brake Company wrote to a senior executive at Wabtec’s headquarters, “[Y]ou and I both agreed that our practice of not targeting each other’s personnel is a prudent cause for both companies. As you so accurately put it, ‘we compete in the market.’”

Second, the DOJ alleges that Knorr Brake Company (a wholly-owned subsidiary of Knorr) and Faiveley Transport North America, agreed not to recruit each other’s employees without prior authorization from the other company. For example, in October 2011, a senior executive at Knorr Brake Company explained that he had a discussion with an executive at Faiveley’s U.S. subsidiary that “resulted in an agreement between us that we do not poach each other’s employees. We agreed to talk if there was one trying to get a job[.]”

Third, beginning no later than 2014, Wabtec Passenger Transit, a U.S. business unit of Wabtec, and Faiveley Transport North America, agreed not to hire each other’s employees without prior approval. For example, in an e-mail to his colleagues, a Wabtec Passenger Transit executive explained that a candidate for employment “is a good guy, but I don’t want to violate my own agreement with [Faiveley Transport North America].”

The DOJ also filed a stipulated final judgment in which the Defendants agreed not to engage in this misconduct further. However, there was no relief obtained for those injured by the misconduct.

Contact Lieff Cabraser

If you worked for Knorr-Bremse AG, Westinghouse Air Brake Technologies Corporation, or Faiveley Tranport S.A., please contact a lawyer at Lieff Cabraser today for a free, confidential review of your potential case.

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