DOJ Follows Through on Warnings Regarding Antitrust Scrutiny of Employer Non-Solicitation Agreements

April 30, 2018

The Department of Justice Antitrust Division (DOJ) has announced that it has entered into a settlement with two of the world’s largest railroad equipment manufacturers resolving a lawsuit alleging the defendant employers had entered into unlawful “no-poach” agreements. The DOJ’s Complaint alleges that three employers unlawfully promised one another “not to solicit, recruit, hire without approval, or otherwise compete for employees.”

Although the allegations concerned agreements between high-level corporate officers, employers should take steps to ensure that all managers, recruiters, and human resources professionals comply with applicable antitrust laws. For example, seemingly innocuous activities like discussing employee salary and benefits at industry conferences can constitute an unlawful information exchange. Employers will be well served to take additional steps to audit their business practices and communications with competitors throughout the organization in order to detect, and mitigate any legal risk associated with potentially unlawful agreements with competitors.