ARTICLE: USA - CARTEL ENFORCEMENT - FINES AND SANCTIONS - FRANCHISES - JOINT-VENTURES - ANTITRUST LIABILITY - WAGE-FIXING AGREEMENTS

To hire or not to hire: U.S. cartel enforcement targeting employment practices

In October 2016, the Antitrust Division of the Department of Justice announced its intention to thereafter—and for the first time—criminally prosecute “naked” no-poach and wage-fixing agreements. Fundamental fairness questions arise when the Justice Department expands the reach of its criminal enforcement program to penalize conduct with fines and jail terms that a few years ago was only subject to consent decrees, and where there has been no judicial review of its classification of such agreements as per se offenses under the Sherman Act. In light of the Justice Department’s recent statements referencing a pipeline full of cases, companies should expect to see cases testing the reach of per se criminal liability for no-poach and wage-fixing agreements.

1. In October 2016, the Antitrust Division of the Department of Justice (“DOJ”) and the Federal Trade Commission issued joint guidance (the “Guidance”) announcing the DOJ’s intention to thereafter—and for the first time—criminally prosecute “naked” no-poach and wage-fixing agreements. [1] A no-poach agreement exists among companies that agree not to compete for each other’s employees, such as by not soliciting or hiring them, whereas wage-fixing concerns an agreement on employees’ salary or other terms of compensation, either at a specific level or within a range. Notably, such agreements can exist among companies that compete to hire and retain employees, even where they do not otherwise compete in the market to sell products or services. For this reason, the potential for antitrust liability

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Authors

  • Hughes Hubbard & Reed (New York)
  • Latham & Watkins (New York)

Quotation

Elizabeth Prewitt, Dina Hoffer, To hire or not to hire: U.S. cartel enforcement targeting employment practices, September 2018, Concurrences Review N° 3-2018, Art. N° 87317, pp. 78-85

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