It added that the application of antitrust law in labour law can be complicated; Some employment agreements and information exchange are legal, while others violate antitrust laws. Managers may face difficult questions about hiring practices that are against the law if they are not properly informed. A second charge is that SCA and a “company B” were also involved in similar illegal activities. For example, the indictment states that an SCA hiring manager sent an email to a recruiter that Company A and Company B are “taboo to SCA.” The non-poaching agreement is stated as follows: “[…] We can recruit junior staff (under management), but our agreement is that we would only talk to executives if they have already told their boss that they want to leave and are looking for it. An email from an SCA hiring manager to a candidate is cited as stating that SCA cannot recruit into Company B “unless candidates have received explicit permission from their employers that they may be considered for employment with us.” The DOJ`s antitrust division opened its first major non-poaching case in 2010 when it filed civil lawsuits against several Silicon Valley companies — including Lucasfilm, Pixar, Google, Apple, Adobe and Intel — for ordering hiring officials to enter into “no cold call” agreements in which companies agreed not to contact their employees and to notify each other. when they make an offer to one of their employees. The settlements cost the defendant companies more than $400 million. “Private class actions and government enforcement action on the use of non-poaching agreements are on the rise, and this type of litigation is expected to increase over the next four years with the Biden administration`s priorities at the U.S. Department of Justice,” said Gerald Maatman, a partner in Seyfarth Shaw`s Chicago office.
to XpertHR. “Employers should carefully review and implement such agreements to address compliance and litigation risks.” The Justice Department launched its first civil enforcement action in 2018 against two of the world`s largest rail equipment suppliers, competing with each other “to attract, hire and retain a variety of skilled employees.” The complaint alleged that the companies had entered into an illegal no-poaching agreement between themselves and, later, with a third supplier of railway equipment. In the settlement agreement, the Department of Justice clarified that it considered non-poaching agreements to be inherent violations of antitrust law, even if there was no actual anti-competitive harm. The Justice Department said it had not laid any criminal charges in the previous civil case because the agency discovered the non-poaching agreements — and the companies terminated them — before the October 2016 guidelines were issued. But the agency had also hinted — and shown with sca indictments — that deals reached or discovered after the october guidelines were issued are more likely to be prosecuted. These DOJ warnings are not empty threats. The Department of Justice has filed civil antitrust lawsuits against several tech giants. Id. at 3-4. The Department of Justice has also participated in private “no poaching” antitrust litigation. In Seaman v. Duke University, Duke eventually paid $54.5 million to settle a class action lawsuit alleging that Duke and the University of North Carolina did not poach.
The DOJ filed an expression of interest in the dispute, and the settlement included provisions allowing the DOJ to monitor compliance and enforce its terms. A major issue for DOJ targets is the likelihood of class actions. For example, the lawsuit filed by the Department of Justice in April 2018 against Knorr-Bremse AG (a German manufacturer of train-related equipment) resulted in settlements of $48.95 million by February 2020. In the case: Railway Industry Employee No-Poach Antitrust Litigation, MDL No. 2850 (W.D. Pa.). The U.S. Department of Justice (DOJ) and the U.S. Federal Trade Guidelines (FTCs) (“Guidelines”) are available on the DOJ website. In its guidelines, the Department of Justice states that “[a] person is likely to violate antitrust laws if he or she … agrees with people from another company to refuse to recruit or hire employees of that other company (so-called “no-poaching” agreements). Id. at p.
3. The consequences of concluding a non-poaching agreement are significant […].