On October 20, 2016, the Antitrust Division of the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) jointly released important guidance aimed at informing human resource (HR) professionals (and others involved in hiring and compensation decisions) on the topic of how the antitrust laws apply to the field of employment. Antitrust enforcement in the employment arena is increasing substantially and carries the risk of "treble damages," potentially resulting in millions of dollars in civil fines, as well as follow-on class action lawsuits by private parties. And now the DOJ has put companies on notice that the agency will enforce against anticompetitive employment violations using its arsenal of criminal sanctions against companies and personal liability for culpable individual employees. HR professionals must beware of this increasing antitrust scrutiny and embrace the opportunity to steer clear of antitrust pitfalls.

Employee hiring and compensation practices already have been in the antitrust crosshairs over the past few years, as illustrated by numerous high-profile enforcement actions taken by both the DOJ and the FTC alleging anticompetitive 'no poaching' and 'wage-fixing' agreements, in particular in the high-tech and healthcare industries. To educate companies and their HR personnel regarding the types of agreements that potentially violate antitrust laws, the DOJ and FTC jointly issued a policy statement entitled "Antitrust Guidelines for Human Resources Professionals" (the "HR Guidelines").1 The agencies also provided a quick reference card that provides a list of "antitrust red flags" that HR professionals should be on the lookout for during their everyday work routines.

Perhaps most striking, the DOJ put companies on notice that the agency now "intends to criminally investigate naked no-poaching or wage-fixing agreements that are unrelated or unnecessary to a larger legitimate collaboration between the employers." DOJ's announcement signals a marked shift from past treatment of these kinds of agreements. While both the FTC and the DOJ have civilly enforced against employers for entering agreements with competitors that limited employee wages and benefits, this is the first indication that the DOJ intends to pursue criminal enforcement.2 The stakes are now much higher, with both companies and individual employees facing potential criminal felony convictions for this same conduct.

The Guidelines indicate that any 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." The agreement can be written or oral, and can be explicit or implicit. Whether the parties are for-profit or not-for-profit companies does not matter, nor does it matter whether the agreement is entered directly by the parties or indirectly through a third party, such as a trade association. The Guidelines also note the risk of information exchanges – even in the context of potential mergers or acquisitions – regarding employee compensation or terms of employment.

The announcement signals the potential for a significant ramping up of antitrust enforcement in the employment arena. Although no industry was singled out in the announcement, past challenges have focused closely on the healthcare and high-tech industries, where highly sophisticated and skilled employees are often in high demand and short supply. Those industries are most likely to continue under close scrutiny as the DOJ and FTC continue their enforcement efforts against anticompetitive employment practices under the newly-issued Guidelines.