Dive Brief:
- An antitrust class-action complaint filed Feb. 7 in the U.S. District Court for the Southern District of Ohio alleged a group of U.S. government contractors entered into illegal no-poaching agreements with each other. The class of current and former employees seeks damages and injunctive relief (Hunter v. Booz Allen Hamilton Holding Corp., Inc et al., No. 2:19-CV-411 (S.D. Ohio Feb. 7, 2019)).
- The plaintiffs, who all worked at the Joint Intelligence Operations Center Europe in Molesworth, England, claim their employers agreed not to hire each other's employees, in violation of U.S. antitrust laws including the Sherman Act and Clayton Act. The group alleged these actions had the effect of eliminating competition for skilled labor, restricting employee mobility and suppressing wages for the purpose of increasing profits.
- According to the plaintiffs, contractors routinely hired workers employed by subcontractors that were not parties to the no-poach agreement. In one instance, the complaint said, a supervisor for one contractor told workers not to attend another contractor's job fair because "[t]he no poaching agreement is still in place so they are not allowed to talk to you." The plaintiffs also argued they were "essentially Defendants' captives" due to the need for workers to hold jobs in order to maintain their work visas and due to the fact that workers would need to pay relocation expenses if they chose to quit their jobs, among other factors. "Defendants knew this, and Defendants unlawfully exploited their power over workers," the complaint said. "This made Defendants' illegal agreement even more profitable."
Dive Insight:
No-poach agreements are an active area of enforcement for the U.S. Department of Justice (DOJ), with employee advocates arguing that such agreements unfairly stack the deck in favor of employers.
In October 2016, DOJ and the Federal Trade Commission (FTC) issued a guidance document for HR stating that it is illegal for employers to agree to fix wages, or to not hire one another's workers. The agencies also reserved the right to pursue criminal charges against companies and individuals involved in those activities.
Last year, in the first no-poach settlement since the release of the 2016 guidance, DOJ and FTC declined to pursue criminal charges, but only because the no-poach agreements had been ended prior to the agencies' announcement of their intent to pursue criminal charges. Notably for employers, DOJ said in the settlement that no-poaching agreements are illegal even if they don't ultimately have any anticompetitive effects — they are per se illegal, according to Mark Krotoski, Partner at Morgan, Lewis and Bockius. Franchise owners, including Jiffy Lube and several fast-food restaurants, have also been among those targeted in the no-poach crackdown.
Unless employers are engaging in a joint venture, merger or acquisition, they should not share sensitive information about employee salaries and recruitment, experts previously told HR Dive, even with employers they don't consider direct competitors. Additionally, employers may want to conduct an "antiitrust audit" of their contracts to ensure they don't contain any potentially unlawful provisions, even if they are not enforced. Compliance efforts also may need to involve a clear reporting component so employees know who to speak with if they suspect a problem.
