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DOJ antitrust official says employee ‘no-poaching’ agreements may be prosecuted

By Elizabeth C. Pope, J.D.

Andrew Finch, the Acting Assistant Attorney General in the Justice Department’s Antitrust Division, stated that “naked” agreements among employers not to “poach” employees or not to compete on employee compensation are “per se illegal” and may be subject to criminal prosecution. Finch, who is serving as the Acting Assistant Attorney General pending the Senate’s confirmation of Makan Delrahim, delivered his remarks in Washington D.C. at the Global Antitrust Enforcement Symposium on September 12.

Obama-era policy. Finch noted that this approach toward employee poaching was set forth in the Antitrust Guidance for Human Resources Professionals issued in October 2016 under former President Obama by the Antitrust Division and the Federal Trade Commission. “Your clients should be on notice,” Finch told symposium attendees, “that a business across the street from them—or, for that matter, across the country—might not be a competitor in the sale of any product or service, but it might still be a competitor for certain types of employees such that a naked no-poaching agreement, or wage-fixing agreement, between them would receive per se condemnation.”

Continuity and consensus. Finch lauded what he described as many years of “continuity and consensus” in the area of antitrust enforcement. In addition to the per se rule, economic analysis and transparency in processes are keys to the stability that is so important to those who enforce competition. “An antitrust enforcement regime with frequent changes is one that businesses cannot plan for, or one that they will plan for by avoiding certain kinds of investments,” he said.

Fundamental to this stable environment is the use of economic analysis, Finch said. “Our economy is organized around free market competition—around economic liberty—and the Sherman and Clayton Acts reflect a congressional recognition of the dangers certain abuses pose to that organizational structure.”

Lastly, Finch noted the importance of transparency in agency decision-making in enhancing the credibility of agencies charged with enforcing the antitrust laws. International engagement in particular demands transparent processes: “the best way to encourage effective approaches abroad is to point to our own work at home.”