US Justice Department Plans to Crack Down on Wage Fixing, Non-Poaching Agreements

US Justice Department Plans to Crack Down on Wage Fixing, Non-Poaching Agreements

The US Department of Justice is planning to bring criminal enforcement actions against employers who collude to hold down wages and prevent employees from changing jobs through non-poaching agreements, Roy Maurer reports at SHRM:

Makan Delrahim, the assistant attorney general for the department’s antitrust division, said that his team has been reviewing potential violations of the antitrust law prohibiting nonpoaching agreements and that added enforcement actions will be taken this year. … “In the coming couple of months, you will see some announcements, and, to be honest with you, I’ve been shocked about how many of these there are, but they’re real,” he said.

“While no criminal charges have yet been brought against employers for entering no-poach or wage-fixing agreements, that is about to change,” said Dee Bansal, an attorney in the Washington, D.C., office of law firm Cooley LLP. “The Trump administration has voiced support of this Obama-era policy.”

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US Government Takes on Wage Fixing and Non-Competes

US Government Takes on Wage Fixing and Non-Competes

Within the past week, the Obama administration has taken steps to discourage employers from engaging in two forms of anti-competitive activity, one of which is illegal and the other, the administration argues, ought to be. Last Thursday, the Department of Justice and the Federal Trade Commission jointly issued a set of guidelines for HR professionals explaining that collusion between businesses to fix wages or agree not to poach employees from each other violates federal antitrust laws. Furthermore, whereas the DOJ has brought civil enforcement actions against several employers over such agreements, including some major technology companies, it plans to begin addressing these violations with criminal charges instead:

Going forward, the DOJ intends to proceed criminally against naked wage-fixing or no-poaching agreements. These types of agreements eliminate competition in the same irredeemable way as agreements to fix product prices or allocate customers, which have traditionally been criminally investigated and prosecuted as hardcore cartel conduct. Accordingly, the DOJ will criminally investigate allegations that employers have agreed among themselves on employee compensation or not to solicit or hire each others’ employees. And if that investigation uncovers a naked wage-fixing or nopoaching agreement, the DOJ may, in the exercise of its prosecutorial discretion, bring criminal, felony charges against the culpable participants in the agreement, including both individuals and companies.

One expert tells SHRM’s Roy Maurer that now would be a very good time for employers to double-check their policies for compliance:

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