The Antitrust Division of the Department of Justice (DOJ) plans to begin criminally investigating and prosecuting employers who enter wage fixing and anti-poaching agreements with their competitors. In advance of its new push, the DOJ – together with the Federal Trade Commission (FTC) – issued guidance targeted at Human Resources (HR) professionals, who often make hiring and compensation decisions at their companies, or are at least in a unique position to identify and prevent violations.
The DOJ and FTC jointly enforce U.S. antitrust laws, which prohibit certain restrictions on competition. Historically, the DOJ has prosecuted practices such as price fixing among competitors, or agreements between competitors to set the same price for a particular good or service. Now, the DOJ intends to investigate and prosecute agreements between “competing employers to limit or fix the terms of employment for potential hires.” In short, employers entering wage fixing or anti-poaching agreements with other employers risk criminal prosecution for antitrust violations.
The burden may now be on HR professionals to help ensure legal compliance, in part because the DOJ and FTC claim HR professionals are often in “the best position to ensure their companies’ hiring practices comply with the antitrust laws.” HR professionals have been tasked with implementing antitrust safeguards and preventing inappropriate discussions and agreements with competitors. The Antitrust Guidance for Human Resource Professionals (the Guidance) provides a deeper explanation of the relevant laws, potential violations and best practices for avoiding liability. A complete copy can be found here.
The following have been specifically identified by the FTC and DOJ as examples of “Antitrust Red Flags” for HR professionals:
- Agreements with other companies about employee salaries, compensation, or other terms or conditions of employment;
- Agreements with other companies regarding hiring/soliciting their employees – or even expressing a desire to avoid aggressive competition for talent;
- Sharing information about employees’ compensation, or other terms or conditions of employment, with another employer;
- Participating in a meeting or discussion in which the foregoing topics are discussed;
- Discussing the above topics with peers from other companies – including during non-professional social events; or
- Receiving data about another company’s employees’ compensation.
For more Antitrust Red Flags click here. Based on the Guidance, employers should expect expansive interpretations of existing antitrust laws. HR employees in particular should take heed as they have been specifically identified as individuals in positions of authority with respect to hiring and compensation decisions, and are likely to stand on the front lines if their company is the target of an investigation.