Justice Dept. Is Going After ‘No-Poach’ Agreements

The Justice Department will soon announce criminal enforcement actions against companies that have “no-poach” agreements, the agency’s top antitrust cop said today.

Makan Delrahim speaks during his Senate Judiciary Committee confirmation hearing to be Assistant Attorney General in the Antitrust Division. Photo by Mark Wilson/Getty Images

“We’ve been very active” in reviewing potential violations of the antitrust law that take the form of agreements not to compete for workers, said Makan Delrahim, the DOJ’s assistant attorney general for the antitrust division, at a conference sponsored by the Antitrust Research Foundation at George Mason University in Virginia.

“In the coming couple of months you will see some announcements,” he said.
In Oct. 2016, the DOJ issued an “Antitrust Guidance for Human Resource Professionals.” “Agreements among employers not to recruit certain employees or not to compete on terms of compensation are illegal,” the guidance said. It also reminded companies that repercussions from such an antitrust violation can include criminal prosecution.

Corporate officers shouldn’t be surprised by the forthcoming enforcement or the rules themselves. The DOJ’s 2016 statement followed several high-profile lawsuits about no-poach agreements among the biggest Silicon Valley employers, saying the intent was to stifle demand for skilled workers and keep their wages lower.

The DOJ’s guidance in 2016 was “less a guidance and more of a reminder,” Delrahim said.

Even after the DOJ’s clear statement on these agreements, Delrahim said there have been continued violations and they risk severe sanctions.

But if the DOJ knows of a no-poach agreement involving conduct before the 2016 guidance, it might bring civil complaints against the parties to that agreement, he said. If the parties continued their conduct after the DOJ’s policy announcement, “we’ll treat those as criminal,” he said.

Private Litigation

Delrahim also said his division will be more active in private litigation. “We’re actively looking” for cases that might make law on issues important to the division. When division attorneys find such cases, the DOJ will file briefs on the agency’s view of the law.

The DOJ made its first foray into this initiative in November, when it filed an amicus brief in a lawsuit challenging a Seattle ordinance that allows ride-hailing drivers to unionize.

Such briefs, written not on behalf of one side or the other but as friendly assistance to the court, are important to the division because bad court decisions impact the division’s enforcement, Delrahim said.

The DOJ enforces the “exact same law that private parties litigate,” he said.

In the past, the antitrust division has been more reticent, filing briefs in private cases primarily when invited to do so. Now, Delrahim said, the agency won’t necessarily wait for an invitation. If the case is important, the division will be more aggressive about weighing in on its view of what the law should be.