The Department of Justice Antitrust Division (DOJ) and the Federal Trade Commission (FTC) recently issued guidance
to alert human resource professionals and others involved in hiring and compensation decisions to potential violations of the antitrust laws. The impetus for the guidance was the federal antitrust agencies’ recognition that “HR professionals often are in the best position to … implement safeguards to prevent inappropriate discussions or agreements with other firms seeking to hire the same employees.”
The antitrust enforcers’ guidance cautions that agreements and information exchanges among employers that compete to hire or retain employees may be illegal. According to the guidance, below is a list of antitrust red flags that arise HR professionals or their colleagues:
- Agree with another company about employee salary or other terms of compensation, either at a specific level or within a range.
- Agree with another company to refuse to solicit or hire that other company’s employees.
- Agree with another company about employee benefits.
- Agree with another company on other terms of employment.
- Express to competitors that you should not compete too aggressively for employees.
- Exchange company-specific information about employee compensation or terms of employment with another company.
- Participate in a meeting, such as a trade association meeting, where the above topics are discussed.
- Discuss the above topics with colleagues at other companies, including during social events or in other non-professional settings.
- Receive documents that obtain another company’s internal data about employee compensation.
The antitrust enforcers’ guidance announces that “going forward, the DOJ intends to proceed criminally against naked wage-fixing or no-poaching agreements.” Other potential costs for violations of the antitrust laws include civil enforcement actions by the DOJ and FTC against companies or individuals. Additionally, if an employee or other private party were injured by an illegal agreement among potential employers, that party could bring a civil – or, as seen in recent cases against technology companies – a class action lawsuit.
The take-away here is simple: HR professionals need to be on the alert for antitrust violations and, when in doubt about the legality of any action, obtain legal advice from experienced antitrust counsel.