No-hire or “no-poaching” agreements have recently come under increasing scrutiny by the federal government, as well as various state regimes. However, a recent Ninth Circuit decision upholding a no-poach agreement highlights the various hurdles an antitrust claimant will face in bringing such a claim.
In Fonseca v. Hewlett-Packard Company, Case No. 20-56161 (9th Cir. Oct. 14, 2021), the Ninth Circuit upheld the dismissal of a former Hewlett-Packard Company employee’s claims that the company hatched an unlawful no-poaching agreement with a competitor. The Court affirmed the August 2020 dismissal from the Southern District of California in a short, unpublished opinion referring to the lower court’s decision as “thorough and carefully reasoned.” The case highlights the importance of consistency between the antitrust allegations and the surrounding business context.
Plaintiff Bryant Fonseca is a former HP employee who was laid off in 2017 under the company’s U.S. Workforce Reduction (“WFR”) plan after working for the company for about 36 years. He asserted age discrimination claims on a class-wide basis and antitrust claims under the federal Sherman Act and the state Cartwright Act, among other claims.
Fonseca’s antitrust theory was that HP entered into an unlawful no-poaching agreement with competitor 3D Systems. The impetus for the agreement, according to Fonseca, was the movement of Vyomesh Joshi from HP to 3D Systems, where he landed the top job of CEO and allegedly began...
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