Hey Compliance Warriors,
Remember the time the DOJ (Dept. of Justice) warned human resource (HR) professionals and others involved in hiring and compensation decisions to potential violations of the antitrust laws?
This is a VERY interesting read. Most HR folks have no idea about the gravity of these (often well-meaning) agreements.
In 2016, the DOJ warned HR professionals and any other person that works in the recruiting and hiring process that they could suffer prison time – personally – for violating anti-trust laws.
“An agreement among competing employers to limit or fix the terms of employment for potential hires may violate the antitrust laws if the agreement constrains individual firm decision-making with regard to wages, salaries, or benefits; terms of employment; or even job opportunities. HR professionals often are in the best position to ensure that their companies’ hiring practices comply with the antitrust laws. In particular, HR professionals can implement safeguards to prevent inappropriate discussions or agreements with other firms seeking to hire the same employees. https://www.justice.gov/atr/file/903511/download“
In January and again in July 2021, Surgical Care Affiliates LLC and its related entity (collectively SCA) were charged with entering into and engaging in two separate bilateral conspiracies with other health care companies to suppress competition between them for the services of senior-level employees. The charged conspiracies began as early as May 2010 and continued at least as late as October 2017, and at least as early as February 2012 and continued until at least as late as July 2017, respectively. https://www.justice.gov/atr/case-document/file/1411111/download
Agreements among employers not to recruit certain employees or not to compete on terms of compensation are illegal. An HR professional should avoid entering into agreements regarding terms of employment with firms that compete to hire employees. It does not matter whether the agreement is informal or formal, written or unwritten, spoken or unspoken.
An individual likely is breaking the antitrust laws if he or she:
• agrees with individual(s) at another company about employee salary or other terms of compensation, either at a specific level or within a range (so-called wage-fixing agreements), or
• agrees with individual(s) at another company to refuse to solicit or hire that other company’s employees (so-called “no poaching” agreements).
Even if an individual does not agree orally or in writing to limit employee compensation or recruiting, other circumstances – such as evidence of discussions and parallel behavior – may lead to an inference that the individual has agreed to do so.
HR professionals, hiring managers, and business owners must understand that naked wage-fixing or no-poaching agreements among employers, whether entered into directly or through a third-party intermediary, are per se illegal under the antitrust laws. That means that if the agreement is separate from or not reasonably necessary to a larger legitimate collaboration between the employers, the agreement is deemed illegal without any inquiry into its competitive effects. Legitimate joint ventures (including, for example, appropriate shared use of facilities) are not considered per se illegal under the antitrust laws.
For further information about this case specifically: