Why do Human Resources Professionals and Employment Law Attorneys need to worry about antitrust law?
I’ll confess it’s not a question that many of us thought we would need to answer. I didn’t take the class on antitrust law in law school.
But over the last few years, antitrust law HAS been creeping more and more into the HR area and the latest development should provide a big flashing caution sign to all employers.
First, a very brief background, in October 2016, the Department of Justice released “Antitrust Guidance for Human Resources Professionals” — an important document to caution employers that antitrust laws may be implicated for agreements by competing employers to limit or fix the terms of employment for potential hires.
“An individual likely is breaking the antitrust laws if he or she:
• agrees with individual(s) at another company about employee salary or other terms of compensation, either at a specific level or within a range (so-called wage-fixing agreements), or
• agrees with individual(s) at another company to refuse to solicit or hire that other company’s employees (so-called “no poaching” agreements).”
Despite the guidance, what was commonly understood is that such a practice could open the company up to civil liability.
But over the last week, a much greater risk was exposed — that of criminal enforcement.
Specifically, the U.S. Department of Justice said last week that a grand jury has indicted a company in Texas in its first criminal case targeting “no poaching” agreements.
It’s a major escalation in the enforcement area. You can view the indictment here. You can read the DOJ’s press release here.
I’ve already heard from several clients with major concerns and how to calculate risk here.
HR professionals should escalate these concerns immediately to management to figure out what exposure your company has. Have you entered into any no-poaching agreements? Do you talk with your competitors about what the “market rate” is for certain positions? Have you talked with others about what benefit should (or should not) be offered in your industry?
It’s unclear what position President-Elect Biden will take with regard to this criminal indictment but it’s hard to see how the DOJ won’t continue to push this area of law further.
For HR professionals, be very mindful of your communications outside the company; you’re now on notice that employment law covers antitrust issues.