Last month, the U.S. Department of Justice (DOJ) followed its 2016 Antitrust Guidance for Human Resources Professionals to file criminal charges against individuals or companies that enter into naked wage or no-poaching agreements. First, as reported here, on December 9, 2020, the Department of Justice received an indictment against the president of a recruitment company for allegedly violating Section 1 of the Sherman Act by conspiring with competitors to “set salaries” paid to physiotherapists (PTs) and physiotherapist assistants (PT). Although it is not mentioned in the indictment, a related act. Less than a month after the DOJ filed his first charge of sharing compensation, the DOJ files his first charge of “non-poaching” Before an employee receives a relocation incentive, he or she must sign a written agreement to complete a certain period of employment with the agency at the new workplace. The service contract must specify the duration, start and end dates of the period of service. the level of incentive; the method and timing of incentive payments; the conditions under which a contract is terminated by the Agency; any obligation of the Agency or the employee when a service contract is terminated (including the conditions under which the employee must repay an incentive or under which the Agency must make additional payments for partially provided services); and any other condition for obtaining and maintaining an incentive for resettlement. In addition to establishing residence in the new geographic location before paying a relocation incentive, an employee must maintain a residence in the new geographic location for the duration of the service contract. A relocation incentive is terminated for employees who do not have a residence in the new geographic location throughout the service contract. At regular intervals throughout the service contract, employees may be required to provide proof of residency. Examples of proof of residence include a rental agreement, proof of purchase of real estate, electricity bill, or similar document to ensure that the employee is still living in the new location. An agency may waive the approval requirement on a case-by-case basis if the employee is a member of a group of employees subject to a mobility agreement or if a significant organizational unit is moved to a new workplace. As part of such a waiver, an agency must specify the group of employees covered, the conditions under which the waiver is approved, and the period during which the waiver may be applied.
Employee groups must be approved for relocation incentives according to the same criteria as those that apply to individuals. (See 5 CFR 575.208(b).) Jindal provides the first clear statement that collective agreements between competing employers are in themselves illegal. This decision, along with the Biden administration`s executive order to promote competition in the U.S. economy, suggests that the Justice Department will continue to look for ways to take antitrust enforcement action against employers. Therefore, employers should exercise caution in their communications regarding recruitment and compensation and seek advice when receiving requests from the Department of Justice, the Federal Trade Commission, or their state counterparts. Finally, as indicated here, the Ministry of Justice will organize a public forum workshop on promoting competition in labour markets from 6 to 7 December 2021. The Department of Justice made its factual allegations in terms unflattering to defendants and very similar to those used in criminal pricing against competing sellers. DaVita, for example, allegedly had an unwritten “gentlemen`s agreement” with a competing company so as not to debauch the other`s executives. Recruitment efforts were only permitted after the employee had informed his employer of his intention to leave. Even when a dismissal was issued, the defendants would sometimes have refused to interview the candidates, hide the existence of the agreement and later inform the current employer of the scope and reaction.
The indictment alleges that the defendants had a “valuable relationship” that they did not want to jeopardize by fighting over senior officials. The government is trying to portray these non-poaching cases as mere criminal conspiracies between competing companies, including allegations of obfuscation and constant monitoring to verify compliance. The 2016 HR Guidelines state that IT`s policy is to pursue only non-compete obligations that are “distinct or not reasonably necessary for broader legitimate cooperation between employers” (p.B. “appropriate sharing of facilities”).3 The DOJ therefore nominally recognizes that the facts and circumstances for assessing whether solicitation prohibitions are properly applied under criminal law. are important. But the 2016 HR guidelines lack the power of the law and say very little about what the Justice Department would consider “legitimate cooperation.” For example, it does not address the usual circumstance in which a former employer attempts to enforce a non-solicitation agreement against a new employer with whom it is not engaged in ongoing cooperation. Employers facing repeated disputes of this type with the same new employer should carefully consider with a lawyer whether a non-poaching agreement between employers is a legitimate way to avoid the costs and business interruptions of repeated legal proceedings on the execution of these agreements. DaVita`s indictments continue the aggressive stance of the Justice Department`s Antitrust Division (“DOJ”) after warning in its 2016 Guidelines for Human Resources Professionals that it would criminalize “non-poaching agreements.” 1 They continue to increase the risk of criminal misconduct for solicitation prohibitions that companies deem reasonable. Court decisions in the SCA and DaVita cases can provide advice to companies and lawyers who wish to manage their risk of criminal exposure due to non-poaching agreements and practices. In the meantime, agreements between employers that may have the effect of restricting the mobility of workers should be reviewed by a lawyer, even if they have been in place for some time. The Justice Department`s position in criminal non-poaching cases raises serious concerns for employers who do not seek to lower wage levels, but instead use written non-solicitation agreements for employees to protect legitimate interests recognized by state law. These interests may be to protect against the theft of trade secrets in sensitive industries; Enable companies to collaborate and innovate to develop new products or services; or to end costly and lengthy litigation when a significant employee brings the knowledge and goodwill of a former employer to that employer`s competitor.
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