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September 12, 2019

ACC Charlotte 3rd Quarter Newsletter: The DOJ's Recent Approach to No-Poaching Agreements

By Ariel E. Harris

ACC Charlotte

Since the fall of 2016, when the Antitrust Division of the Department of Justice (DOJ) announced that from that point forward, it intended to proceed criminally against naked no-poach or no-hire agreements, the private sector has continued to navigate shaky ground.

At its most basic level, a no-poach agreement involves an agreement with another company not to compete for each other's employees, such as by not soliciting or hiring them. No-poach agreements are naked if they are not reasonably necessary to any separate, legitimate business collaboration between the employers. Naked no-poach agreements are per se unlawful because they eliminate competition in the same incurable way as agreements to fix product prices. Naked no-poach agreements present issues because employees benefit from competitive labor markets. When companies agree not to hire or recruit one another's employees, they are agreeing not to compete for those employees' labor.

Originally published as a Nelson Mullins HR Minute Blog.
Republished in ACC Charlotte Newsletter.