Number of no-poach agreements uncovered by DOJ 'shocking,' official says

24 May 2018 10:17am

17 May 2018. By Leah Nylen.

A senior Justice Department official said Thursday it is “shocking” how prevalent agreements have become between companies not to solicit or hire each others’ employees, and antitrust prosecutors have opened many investigations into the practice since the fall.

“Just after I joined the division in August, I think I was speaking at an event at Georgetown Law School, and I said I was surprised at how many no-poach investigations we had pending,” Deputy Assistant Attorney General for Civil Antitrust Barry Nigro said at an event in Richmond, Virginia. “Now I can say that we have a lot more. A lot more. I’m really surprised at how prevalent the practice is.”

Nigro said that several of the new investigations have arisen during the course of merger reviews.

“These are things that have come to our attention through reviewing documents in recent mergers and the frequency with which they come up is eye opening,” he said. “It is a little bit shocking to see how common it is. It’s a lot more prevalent than i would have ever guessed.”

In response to a question, Nigro said the no-poach agreement doesn’t necessarily have to be company-wide policy to raise concerns.

“All of the investigations have started based on evidence that there is some understanding,” Nigro said. “If there is an agreement not to compete between an executive of one company and an executive of another company not to hire employees and there’s no justification for it, that’s illegal. Is that company-wide? I don’t know. It’s still illegal and we would look at it.”

Last month, the DOJ settled with Knorr-Bremse AG and Westinghouse Air Brake Technologies Corporation, known as Wabtec, over allegations that the companies illegally agreed not to solicit or hire each other’s employees. Antitrust officials became aware of the agreement while reviewing the 2015 merger of Wabtec and France’s Faiveley.

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