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DOJ Tells Congress Criminal Prosecution of No-Poach Agreements is Still a “High Priority”

Posted  October 31, 2019

By J. Wyatt Fore

Although federal antitrust regulators have yet to file criminal charges against no-poach agreements, such prosecutions may be forthcoming, according to testimony on Capitol Hill earlier this week.

On Tuesday, the Antitrust Subcommittee of the U.S. House Judiciary Committee held a hearing on Competition in Labor Markets, which included an interesting exchange about the federal government’s commitment to bringing criminal antitrust charges against companies that enter into no-poach agreements, which are agreements not to compete for each other’s employees, such as by not soliciting or hiring them.

Rep. David Cicilline (D-RI), Chair of the Antitrust Subcommittee, confronted the U.S. Department of Justice (“DOJ”) representative—Doha Mekki, Counsel to the Antitrust Division chief, Assistant Attorney General Makan Delrahim—about DOJ’s lack of criminal prosecution against no-poach agreements.  Although a full three years have passed since DOJ and the Federal Trade Commission jointly released the Antitrust Guidance for Human Resource Professionals, which first announced that “[g]oing forward, the DOJ intends to proceed criminally against naked wage-fixing or no-poaching agreements,” no such prosecutions have materialized.

Despite the lack of prosecutions to date, Ms. Mekki emphasized in her prepared remarks that “criminal prosecution of naked no-poach and wage-fixing agreements remains a high priority for the Antitrust Division.”  Her testimony is in line with previous statements by Assistant Attorney General Delrahim, who has emphasized the importance of criminal prosecution of no-poach and wage-fixing agreements.

Rep. Cicilline, however, expressed skepticism about DOJ’s resolve to prosecuting no-poach agreements.  If criminal prosecution is a high priority for the Department, why have there been no prosecutions in the three years since the Joint Guidance?  Ms. Mekki responded that criminal investigations are currently ongoing, even though no criminal prosecutions have been announced.

This debate on Capitol Hill over the lack of criminal antitrust prosecutions of no-poach agreements is just one instance of how the application of antitrust laws in labor markets continues to be a hot topic among antitrust lawyers.

For example, lawmakers have been focusing on applying antitrust laws in labor markets, as they have introduced bills regulating no-poach agreements at both the federal and state level.  The DOJ recently sponsored a Public Workshop on Competition in Labor Markets, at which Steve Cannon, Chair of Constantine Cannon and Managing Partner of its DC office, spoke.  And this blog has focused on the antitrust issues raised by no-poach agreements, including in posts on Frequently Asked Questions and Answers, and the Duke-UNC medical faculty no-poach litigation

Given this continuing debate, antitrust regulators’ focus on labor markets—including by enforcing antitrust laws against companies that restrain competition for workers, either through a no-poach agreement, a no-hire agreement, or a non-compete clause—appears certain to continue for the foreseeable future.

Edited by Gary Malone

 

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