DOJ cases challenging no-poach, wage-fixing likely coming soon

12 October 2017 12:01pm

22 September 2017. By Leah Nylen.

Antitrust prosecutors are likely to bring their first criminal case challenging wage-fixing and "no-poach" agreements soon, if comments by newly installed US Department of Justice officials are any indication.

In some of their first public comments last week, two senior officials at the DOJ's antitrust division highlighted the agency's intent to pursue wage-fixing and no-poach agreements as criminal antitrust violations rather than civil ones. The DOJ announced in October that it would now pursue such cases as criminal violations, but the agency has yet to file any cases.

At a conference* in Washington last week, Barry Nigro, the deputy assistant attorney general for civil antitrust enforcement, said the agency was pursuing "several" cases related to no-poach or wage-fixing agreements.

"The division currently has several pending investigations involving possible agreements to eliminate competition for workers, including so-called no-poach agreements," Nigro said, adding that he was "surprised" to discover the number of investigations when he joined the agency a month before. "I didn't realize that the practice was as common as it is. I expected there would be fewer than we have."

Andrew Finch, currently the acting assistant attorney general for antitrust, also spent a portion of his remarks — his first public speech in the US since taking his post in April — focused on the agency's change in its probes of no-poach agreements.

"It is important that well-defined lines identify the conduct that is deemed to be per se illegal," Finch said, referring to conduct that the DOJ considers automatically illegal without the need to investigate its effects. "The lines need to be bright so that executives can identify them and avoid them."

Finch said that the agency has clearly established that horizontal agreements between actual and potential competitors are per se illegal. Because of that, it makes sense to consider horizontal agreements between companies related to employment as subject to the per se rule, he said.

In most previous cases, the challenged agreements related to agreements within employers in a particular industry. For example, in 2010, the DOJ challenged agreements between a number of major tech companies, including Apple, Google and others, not to solicit each other's highly skilled employees. A number of class actions over the past decade have also challenged agreements between hospitals and other healthcare providers to fix wages for nurses, and another case against Duke University and the University of North Carolina alleged the two schools had agreements not to compete for medical facility faculty.

In his comments last week, Finch suggested that the Justice Department might scrutinize any type of no-poach or wage-fixing agreements, whether companies compete in the same industry or not.

"Companies that sell different products or services might not compete for consumers, but they still can compete for workers," he said. "Your clients should be on notice 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."

Joh Sung-Wook Interview