The American economy is built upon competition. For that reason, the Department of Justice (DOJ) Antitrust Division and Federal Trade Commission (FTC) take very seriously agreements that seem to undermine this basic principle.
But with the era of side deals that skirt antitrust laws, non-poaching agreements and fixed wages fully upon us—especially within the technology sector—the two agencies have stepped up their efforts.
Are your non-solicitation and other employment agreements on the right side of the law when it comes to these antitrust issues?
To help you decide, the agencies recently released an Antitrust Guidance to Human Resource (HR) Professionals. If you’re a hiring manager or human resource (HR) professional, the DOJ and FTC recommend asking yourself the following questions to help determine whether or not an employment agreement or hiring practice is cause for concern when it comes to antitrust matters.
- Does the document agree with another company about employee salary or other terms of compensation, either at a specific level or within a range?
- Does the document agree with another company to refuse to solicit or hire that other company’s employees?
- Does the document agree with another company about employee benefits?
- Does the document agree with another company on other terms of employment?
- Do I express to competitors that we should not compete too aggressively for employees?
- Do I exchange company-specific information about employee compensation or terms of employment with another company?
- Do I participate in meetings, such as a trade association meeting, where the above topics are discussed?
- Do I discuss the above topics with colleagues at other companies, including during social events or in other non-professional settings?
- Have I received documents that contain another company’s internal data about employee compensation?
Answer yes to any of these questions and you may need to evaluate your procedures further. As you can see from the questions themselves, some of the areas that may land your company in hot water are not cut and dry. Practices like salary surveys and non-solicitation agreements are common. While most are compliant, you may find yourself bordering antitrust compliance issues without being conscious of it.
The DOJ has made clear that, going forward, it intends to proceed criminally against ‘naked’ wage fixing and no-poaching agreements and the DOJ has aggressively pursued a number of leading tech companies on these issues. Agreements to share information, while not criminal, may be subject to civil antitrust liability when they have, or are likely to have, an anticompetitive effect. For more information, visit the guide.