In Financier Worldwide: Employment Agreements Subject to Criminal Penalties – DOJ Targets No-Poach and Wage-fixing Deals

August 2018 – The article, "Employment Agreements Subject to Criminal Penalties – DOJ Targets No-Poach and Wage-fixing Deals," by Dina Hoffer, was published in Financier Worldwide Magazine.

In October 2016, the antitrust division of the US Department of Justice (DOJ) and the Federal Trade Commission issued joint guidance announcing the DOJ’s intention to thereafter, and for the first time, criminally prosecute ‘naked’ no-poach and wage-fixing agreements. A no-poach agreement is where companies agree not to compete for each other’s employees by soliciting or hiring, whereas a wage-fixing agreement concerns setting employees’ terms of compensation, either at a specific level or within a range. The potential for antitrust liability may not be obvious to many employers since most antitrust compliance programmes do not focus on HR professionals and warn against agreements between competitors, but companies that compete for employees do not necessarily compete in the marketplace for sales of products or services. The DOJ’s recent remarks promising forthcoming criminal cases indicate that the DOJ fully intends to prosecute such agreements as hardcore cartel offences just like classic price-fixing. While the full reach of the guidance remains untested, companies should take measures to reduce the risk of liability.

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