Federal Regulators to HR Professionals: Remember that the Antitrust Laws Apply to Employment Too
The Department of Justice and the Federal Trade Commission jointly issued an Antitrust Guidance for Human Resources Professionals on October 20, 2016. The DOJ and FTC’s guidance follows several highly publicized employment-related enforcement actions, including one that led to a class action in which Apple, Google, Intel, and Adobe agreed to pay $415 million to settle allegations that the companies agreed not to recruit each other’s employees. This new guidance is a reminder to human resources professionals that pricing and sales are not the only departments that need to be concerned with antitrust compliance.
The overriding theme of the regulators’ guidance is that competition in the employment marketplace is impeded when companies enter agreements with other companies regarding the hiring, soliciting, or recruiting of employees. According to FTC Chairwoman Edith Ramirez, "[c]ompetition is essential to well-functioning markets, and job markets are no exception." The regulators emphasized that agreements between companies not to poach employees or to fix wages, benefits, or terms of employment are per se illegal (unless necessary to a legitimate joint venture). The regulators also warned that merely sharing employment information, even in the context of a proposed merger/acquisition, can be evidence of an illegal agreement and offered guidance on how to avoid running afoul of the antitrust laws.
The guidance discusses several recent employment-related enforcement actions that resulted in consent judgments. But the DOJ and FTC warned that, going forward, naked wage-fixing or no-poaching agreements will be criminally investigated like other hardcore cartel conduct. Human resources professionals should take this warning seriously, particularly in light of the Yates Memo issued last year in which the DOJ expressed its intent to focus on individual accountability—i.e., prosecuting individuals—for corporate misconduct. Indeed, the guidance warned that the DOJ could bring a criminal prosecution against individuals, the company, or both and that employees could bring a civil suit for treble damages.
The guidance contains a Q&A section that answers many basic employment-related questions. The DOJ and FTC also issued a quick reference card that summarizes some of the information in a convenient format.