EU Competition Authorities Escalate Enforcement of No-Poach Agreements

The French Competition Authority recently fined several companies for no-poach agreements, following similar action by the European Commission in the online food delivery sector. These decisions mark a sharp escalation in labor market antitrust enforcement and give further support to the position that no-poach agreements qualify as “by object” violations. Companies should exercise caution in drafting employment contracts and consider the least restrictive ways possible to (1) protect investments in technology/know-how and human capital and (2) retain talent.

This LawFlash summarizes the key takeaways from the landmark decisions by the European Commission (EC) and French Competition Authority (FCA), as well as their practical implications for businesses.

CASE LAW AT THE EU LEVEL

In November 2023, the EC raided the premises of food delivery companies Delivery Hero and Glovo in relation to suspected no-poach agreements violating EU antitrust rules.[1] The formal investigation was initiated on July 23, 2024, based in part on concerns that the two companies may have agreed not to poach each other’s employees before Delivery Hero acquired full control over Glovo.[2] According to the EC, these practices may have been facilitated by Delivery Hero’s purchase of a non-controlling minority shareholding in Glovo in 2018.

On June 2, 2025, the EC fined Delivery Hero and Glovo a total of €329 million for participating in a cartel.[3] According to the EC, the two companies engaged in multi-layered anticompetitive coordination over four years following Delivery Hero’s acquisition of a minority stake in Glovo. This included exchanging commercially sensitive information, allocating geographic markets, and agreeing not to poach each other’s employees.

Specifically, the shareholders’ agreement signed at the time Delivery Hero acquired its minority stake in Glovo contained limited reciprocal no-hire clauses[4] for certain employees. Shortly thereafter, this arrangement evolved into a general agreement not to actively approach each other’s employees. Both companies ultimately decided to settle the case with the EC.

The pace of the case—approximately one year from the opening of the formal investigation to the adoption of the infringement decision—is unusually fast by the EC’s standards for cartel cases and is likely explained by the fact that, faced with the evidence adduced by the EC, the companies concerned decided to settle the case.

It remains to be seen whether any follow-on actions will materialize after this decision. Such actions could potentially be brought by individuals harmed by the anticompetitive conduct, similar to cases seen in the United States, where no-poach agreements have been under scrutiny for a longer period. Specifically, employees who were subject to the no-poach agreement may seek compensation for lost job opportunities resulting from the anticompetitive no-poach agreements (see further below).

CASE LAW AT THE FRENCH LEVEL

As noted in our prior analysis, in 2023, the FCA notified several companies active in the engineering, technology consulting, and IT services sectors that it would investigate potential violations on labor markets.[5] On June 11, 2025, the FCA sanctioned four companies for engaging in general no-poach agreements. While the full decision is not public yet, the FCA published a summary of the decision in a press release.[6]

The anticompetitive practices came to light following a leniency application submitted by Ausy, which notably disclosed the existence of a non-solicitation agreement with Alten. Based on the information provided by Ausy, the FCA obtained judicial authorization from the “juge des libertés et de la détention”—a French judge competent for overseeing the legality of certain investigative measures—to conduct dawn raids at the following companies active in the engineering and IT services sector: Alten, Bertrand, Expleo, and Atos.

The FCA dawn raids uncovered two separate sets of restrictive practices between Ausy and Alten, on the one hand, and Expleo and Bertrandt, on the other:

• Ausy and Alten: Between 2007 and 2016, the two companies entered into gentlemen’s agreements[7] not to poach business managers. These agreements prohibited both active solicitation and passive acceptance of applications from each other’s employees. No limits were placed on the duration of these arrangements or on the scope of business managers covered.
• Expleo and Bertrandt: Between February and September 2018, the two companies similarly entered into gentlemen’s agreements not to poach each other’s employees.

The FCA imposed fines totaling €29.5 million (around $34 million) on Alten, Expleo, and Bertrandt for taking part in these gentlemen’s agreements. Alten received the highest fine (€24 million). Ausy was not sanctioned, as it benefited from full immunity under the French leniency program. Expleo and Bertrandt were fined lower amounts. The reasoning behind the FCA’s fine calculation is not yet publicly available and will become clearer once the full decision is published, although we expect that differences in the duration of the practices may account for the variation in fine levels.

The fine appears to be significantly lower than the FCA’s previous decision. In 2017, the FCA imposed fines totaling €302 million on the three leading manufacturers of polyvinyl chloride (PVC) and linoleum floor coverings for price fixing and other practices, including wage-fixing and no-poach agreements.[8] While this might be partly due to the absence of other traditional anticompetitive practices beyond no-poach arrangements, the reasoning is not yet known.

In addition to the above, Expleo and Bertrandt, on the one hand, and Ausy and Atos, on the other, also included non-solicit clauses in partnership agreements. However, the FCA decided not to sanction such clauses because they were limited in duration and scope (they only concerned certain categories of employees, certain projects, etc.) under the specific circumstances of this case. This does not prevent the FCA from sanctioning such clauses in the future, under different factual circumstances.

KEY TAKEAWAYS

• It is now clear from the above EC and FCA decisions that no-poach agreements qualify as “by object” restrictions and amount to supply source sharing.
  • In the Delivery Hero/Glovo decision, the EC qualified these practices, including the no-poach agreement, as a single and continuous infringement amounting to a “by object” restriction (i.e., a restriction inherently harmful to competition—similar to “per se” violations under US antitrust laws). Similarly, the FCA found that the gentlemen’s agreements on no-poach constituted “by object” restrictions.
  • This is in line with the EC’s May 2024 Antitrust in Labour Markets policy brief, which announced the EC’s intention to sanction no-poach agreements as “by object” restrictions.
  • The above approach was endorsed by the European Court of Justice’s recent decision in the FIFA v. BZ case, where the court referred to collusive behavior consisting of limiting or controlling, in certain sectors or on certain markets, “the recruitment of highly skilled workers” as a possible restriction by object.[9]
  • Advocate General (AG) Nicholas Emiliou’s opinion of May 15, 2025 in the Portuguese football clubs case provides additional support for this argument.[10] AG Emiliou found that no-poach agreements, unless ancillary to transactions, have “all the characteristics to be considered prima facie restrictive of competition ‘by object.’”[11] AG Emiliou reasoned that, instead of competing to recruit the best employees—by offering higher salaries and/or better working conditions and opportunities—the companies “lock in” their staff, creating a “freezing effect” on the terms of employment. This leads to a suboptimal allocation of human resources, reduced efficiency and innovation, and lower wages for workers. Both the labor market and, potentially, the output market (products/services of the company) are thus negatively affected. Accordingly, AG Emiliou concluded that the economic rationale of most no-poach agreements between competitors is anticompetitive.
• While the EC decision concerns no-poach agreements in the context of other traditional anticompetitive practices, the FCA decision is the first decision where no-poach is the central theory of harm. This demonstrates that the FCA intends to treat no-poach agreements as standalone infringements warranting sanction, even in the absence of price-fixing or market-sharing practices. The EC could also sanction no-poach on a standalone basis in the future.
• The application of antitrust to labor markets is sector-agnostic. The EC decision concerned the online food delivery sector, while the FCA decision concerned the engineering, technology consulting, and IT services sectors. In this regard, the FCA previously underlined in a report on the generative AI sector that skilled personnel are considered key in the upstream generative AI value chain (we refer to our prior analysis in this regard). In the decision at hand, the FCA reiterates that the digital sector is marked by a scarcity of talent and the strategic importance of human resources.
• The EC and FCA decisions confirm that all levels of employees are covered, from business managers in the FCA decision to any employee in the EC decision.
• These decisions at both the EU and the French national level signal firm enforcement intentions. This is illustrated not only by the significant fine imposed by the EC (€329 million), but also by the FCA’s requirement that the sanctioned companies publish the decision on LinkedIn and in the journal Le Monde Informatique.
• As noted above, this could become fertile ground for damages claims, especially if plaintiffs firms and cartel litigation finance companies decide to aggressively pursue such cases. Anecdotal evidence reported on July 7,2025 by the French newspaper Le Figaro identified examples of:
  • An applicant “hitting a wall” when seeking a job with a competitor company that had an arrangement with his employer effectively blocking any chance of a move;
  • An applicant having a job offer withdrawn as a result of pressure by her employer on the competitor, with which there was an arrangement;
  • The same applicant subsequently facing retaliation by her employer (in the form of no pay increase, but additional workload) such that she viewed her career as being “on hold”;
  • Senior managers only being able to escape such restrictive situations by creating their own consulting companies.
• Additionally, the Delivery Hero/Glovo decision shows that antitrust scrutiny can arise from an acquisition of minority shareholdings in a competitor, because this can create collusion risks, particularly through unlawful information exchanges or market sharing. Companies should therefore implement robust guardrails to ensure that any governance rights are strictly limited to what is necessary for keeping the value of the investment and similarly limit exchanges of commercially sensitive information.
• The implications of these cases for merger control are important. The Spanish National Competition Authority (CNMC) cleared Delivery Hero’s acquisition of full control over Glovo in 2022, following a Phase I review. In contrast, the earlier minority shareholding acquisition was not subject to any ex-ante merger review simply because it was not reportable under merger control rules.[12] Nonetheless, the EC later reviewed the restrictive practices in the context of the minority shareholding acquisition under the antitrust lens, looking at them ex post facto.[13]
  • A comparable situation occurred in France. In its decision in the meat-cutting sector,[14] the FCA confirmed that it can investigate and sanction non-reportable transactions (i.e., ones that fall outside the merger control rules) under anti-collusion rules.[15] At EU level, following the Towercast judgement,[16] it was already clear that competition authorities can review non-reportable transactions under abuse of dominance rules.[17]
  • In the French meat-cutting case, the companies argued that a merger cannot be reviewed ex post facto under antitrust rules where the merger was not reportable under merger control rules.[18] The FCA rejected this non bis in idem (double jeopardy) defense, explaining that the transactions had not been reportable under merger control and thus had not been previously reviewed or cleared.
  • The Delivery Hero/Glovo case gave the EC the opportunity to confirm, as the FCA did in its decision in the meat-cutting sector, that it can review non-reportable transactions under Article 101 TFEU ex post facto.
• Legal, human resources, and compliance departments across all industries will have to exercise caution in drafting employment contracts and consider the least restrictive ways possible to protect investments in technology/know-how and human capital and retain talent. For example, alternatives to no-poach agreements, depending on the jurisdiction, may include (1) nondisclosure agreements, (2) incentives to stay with an employer for a minimum amount of time (such as a retention bonus payable subject to the employee’s continued service with the company until a certain date), or (3) narrowly tailored noncompete clauses. However, noncompete clauses are subject to increasingly restrictive judicial analysis, making their application complex and costly. It follows from the above decisions that businesses should avoid general agreements with undetermined duration and unrestricted scope.
  • Given the legal differences in domestic labor laws in the EU member states—and beyond—and the fact that each case will turn on its specific facts and circumstances, tailored advice from local counsel will be crucial on a case-by-case basis.