President Trump’s appointees took control of the Justice Department and quickly announced a sharpened focus on the criminal investigation and prosecution of companies for entering into no-poach agreements, which are agreements between companies not to hire or solicit the other company’s employees. While the prosecution of these agreements has been a theoretical possibility since 2016, to date, the United States Antitrust Division enforcers have not criminally indicted companies involved in a no-poach case. However, the Division has stated that it has open criminal investigations into no-poach agreements, making future criminal prosecutions of no-poach agreements appear inevitable. While not all no-poach agreements are susceptible to criminal prosecution, companies should be mindful of the Division’s focus on no-poach agreements and seek guidance as to whether and when its no-poach agreements could face criminal liability.

A new target

A change in Administration inevitably brings new enforcement priorities. Trump’s Antitrust Division has been no exception. Makan Delrahim, the assistant attorney general of the Antitrust Division, wrote in the Division’s annual update that it is putting “[m]arket participants are on notice [that the] Division intends to zealously enforce the antitrust laws in labor markets and aggressively pursue information on additional violations to identify and end anticompetitive no-poach agreements that harm employees and the economy”. A month later, Barry Nigro, the deputy assistant attorney general, announced that the Department of Justice (DoJ) had pending criminal investigations into no-poach agreements, including investigations in the healthcare industry.

Jul-Sep 2018 issue

Hogan Lovells US LLP