On October 20, the US Department of Justice (DOJ) and Federal Trade Commission (FTC) issued guidance titled Antitrust Guidance for Human Resource Professionals, signaling that the agencies will bring enforcement actions for wage-fixing and no-poaching agreements under federal antitrust law. In their LawFlash (FTC and DOJ Issue Antitrust Guidance for HR Professionals), partner Mark Krotoski and associates David Brenneman and Melissa Hughes discuss the significance of this guidance, which may apply to non-solicitation clauses in outsourcing agreements.
Prior to this guidance, the DOJ and FTC only pursued civil cases against companies engaging in wage-fixing or entering into no-poaching agreements. The new guidance changes this approach, stating that the DOJ, which has the authority to enforce criminal violations of antitrust laws, will consider a criminal prosecution against an individual, a company, or both, for engaging in wage-fixing and entering into agreements with no-poaching clauses. The guidance includes specific examples of conduct that the DOJ may now consider prosecuting.
The guidance states that the DOJ and FTC will continue to enforce civil actions against companies involving other types of employment related conduct. The guidance also clarifies that narrowly tailored wage-fixing or no-poaching agreements entered into by companies engaging in certain relationships, such as a joint venture, will be subject to civil, and not criminal, enforcement.