In the wake of the Federal Trade Commission’s attack on non-competes,[1]the Department of Justice (DOJ) lost its most recent fight in its related battle against no-poach agreements. Last week, in United States v. Manahe et al., a federal jury in the United States District Court for the District of Maine acquitted four defendants of conspiring to fix their employees’ wages in restraint of trade.[2]Prosecutors accused owners of separate home health care agencies of agreeing to not hire each other’s employed caretakers and to not raise their wages above $16 per hour in a purported attempt to preserve profits.[3]After a two-week trial, the jury handed down “not guilty” verdicts on all counts.[4]
While Prosecutors Won on the Law, They Were Foiled by the Facts.
The prosecutors in Manahe secured a favorable interpretation of the antitrust laws, but still failed to demonstrate that the defendants actually entered into an agreement in violation of those laws. Specifically, they convinced the court to treat no-poach agreements as per se violations of the Sherman Act.[5]This meant that as long as the jury found the defendants entered into a no-poach agreement, they could convict without finding that the agreement had anticompetitive effects.[6]Accordingly, the jury was instructed to find the defendants guilty if they were convinced, beyond a reasonable doubt, that the defendants actually entered into an agreement to fix wages and to not hire each other’s employees.[7]
The...
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