Antitrust enforcement of conduct in labor markets has continued to ramp up during the past decade, with particularly intense scrutiny on agreements between employers of different companies not to recruit or solicit employees of the other, often called ‘no-poach’ agreements.
President Biden signaled that competition in the labor market would be a priority for his administration, issuing an executive order in July 2021 entitled ‘Promoting Competition in the American Economy’, which includes 72 initiatives by more than a dozen federal agencies in an aim to address competition issues across the economy.[1] In furtherance of one such initiative, the Department of Justice (DOJ) and the Department of Labor signed a memorandum of understanding on 10 March 2022, putting into writing commitments by both agencies to exchange information to assist with investigations into possible antitrust violations in labor markets.[2]
Consistent with these priorities, we have seen a significant increase in the number of investigations, criminal indictments, and private litigation based on alleged no-poach agreements. Below, we summarize the legal landscape and recent developments and highlight key trends. Specifically, after an introduction to the legal standard and how antitrust laws apply to employment agreements, we discuss the DOJ’s recent criminal indictments, the DOJ’s latest statements on its position regarding the legal standard applied to franchisee/franchisor agreements, and...
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