NO-POACH NO MORE? – NOT SO FAST
In the seven years since the US Department of Justice (DOJ) Antitrust Division announced no-poach and wage-fixing agreements would be prosecuted criminally, the DOJ has indicted only a handful of cases, lost four of them in jury trials and negotiated a single guilty plea. In November 2023, after the DOJ voluntarily dismissed a case that was ready for trial, some predicted the end of the DOJ’s pursuit of its no-poach policy. Not so fast. Multiple signs point to the DOJ continuing to pursue criminal charges for no-poach and wage-fixing agreements, and for labour issues to figure even more prominently in antitrust enforcement.
After announcing its policy, the DOJ is slow to bring cases
In the waning days of the Obama administration in October 2016, the DOJ and Federal Trade Commission (FTC) jointly issued ‘Antitrust Guidance for Human Resource Professionals’, warning against entering into no-poach agreements – agreements between firms not to solicit or hire from each other – and wage-fixing agreements. The DOJ declared that, going forward, it would prosecute such conduct criminally. The policy continued in effect after the change of administrations, with Makan Delrahim, then-assistant attorney general for antitrust, announcing in January 2018 that no-poach indictments would be forthcoming. He said he had been “shocked about how many of these there are”. In a September 2019 workshop on competition in labour markets, Mr Delrahim reaffirmed that “criminal prosecution of naked no-poach and wage-fixing agreements remains a high priority for the Antitrust Division”. Implicitly acknowledging the lack of criminal indictments since the 2016 guidance, he predicted that the DOJ’s success would not be measured quantitatively, i.e., by the number of cases brought or won, but by the “qualitative performance of our investigative work”.
Apr-Jun 2024 issue
Skadden, Arps, Slate, Meagher & Flom LLP