In 2016, the Antitrust Division of the Department of Justice (DOJ) published the Antitrust Guidance for Human Resource Professionals. It was released to “alert human resource (HR) professionals and others involved in hiring and compensation decisions to potential violations of the antitrust laws”. Prior to its release, violations of antitrust laws were met only with a civil punishment. However, the DOJ and Federal Trade Commission (FTC) is now enforcing these laws much more seriously, with both civil and criminal consequences.
It is important to note that violations may be explicit (e.g., two companies enter into a formal agreement not to hire each other's personnel) or implicit (e.g., two companies agree to share wage data and reset their compensation packages to align with the market or create a maximum wage to be paid to specific skillsets or roles). In other words, if there is any kind of agreement that include fixing wages, enacting a no-poaching arrangement, or other anti-competitive pacts, then there is definite risk of serious punishment by the DOJ for violation of antitrust laws. Even discussions in public or private forums on related topics is also prohibited and may lead to both civil and criminal penalties. Such discussions are not only prohibited among the decision makers and/or hiring managers but really by anyone who deals with hiring, compensation or other activities, such as HR personnel, salespersons or even third party headhunters.
Some wrongfully believe that this kind of misconduct would be unlikely to happen in their own workplace. Many big-name companies have already been caught up in antitrust lawsuits or proceedings with the DOJ, Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc., and Pixar. Not just large technology companies, but even smaller businesses and institutions are at risk of violating these 'no-poaching' antitrust laws.
The Antitrust Guidance details things to look out for in a company’s hiring practices. These red flags include:
With these red flags in mind, it becomes much more obvious how easily a manager or an HR professional may put their company at risk for criminal or civil liability. If a no-poach agreement is made between any two entities, this is regarded as a per se (automatically illegal) violation of the antitrust laws. The DOJ and FTC are aggressively cracking down on obstructions of competition in the employment market. With every company being at risk, it is highly recommended to start educating your HR and other employees in charge of hiring and compensation on proper hiring procedures to be followed in compliance with the DOJ guidelines.