In January 2021, I wrote about the potential for a new wave of lawsuits that employers needed to pay attention to — lawsuits (and criminal charges) based on antitrust law.  In that post, I highlighted a little-noticed case in which the U.S. Department of Justice had indicted a Texas company for its no poaching agreements with other companies.

Indeed, I noted that “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.”

Flash forward to the present.  The drip-drip of a lawsuits is starting to turn into a stream — a trend noted by The New York Times today.  

In a first, the Justice Department has brought a series of criminal cases against employers for colluding to suppress wages. The push started in December 2020, under the Trump administration, with an indictment accusing a staffing agency in the Dallas-Fort Worth area of agreeing with rivals to suppress the pay of physical therapists. The department has now filed six criminal cases under the pillar of antitrust law, the Sherman Act, including prosecutions of employers of home health aides, nurses and aerospace engineers.

This aggressive approach has had direct implications in Connecticut. Last December, a federal grand jury indicted six aerospace executives and manages for participating, according to the USDOJ, in a “long running conspiracy to restrict the hiring and recruiting of employees among their respective companies”.

Arguments by employers that this is a new area of law and that they haven’t been provided with fair warning that their behavior was against the law have been falling flat.  The court in the case I cited in my January 2021 post denied a motion to dismiss noting that employers should know that wage fixing agreements are illegal per se.

For employers, there are a few key takeaways:

  • Educate executives and managers about this developing area of law.
  • Amend any code of conduct policies to make it clear that wage-fixing agreements or no poaching agreements are a violation of the company’s code (in addition to being against the law).
  • Review any non-compete agreements by existing employees to ensure that they will pass muster under developing state laws.
  • If your company has the resources, tap someone from the legal department or internally to be in charge of antitrust considerations.

This is a new and important area of law for employers to be mindful of.  Seek out your legal counsel to talk about any concerns or considerations you might have.