Does Antitrust Law Apply to the Market for Talent?

Antitrust Laws Restrain Agreements Among Competitors.

The Sherman Act and the Clayton Act are two federal statutes that set the foundation for U.S. Antitrust law more than 100 years ago.

The Antitrust laws are designed to protect consumers and competitors from abusive behavior by market-dominating companies.  They began when large companies had set up “Trusts” for the control and division of markets for such things as oil and steel.

Non-Solicitation Agreements are Under the Microscope.

William A. “Zan” Blue, Jr., of the Costangy, Brooks employment law firm, recently wrote an article describing how the U.S. Justice Department and the Federal Trade Commission (enforcers of the Antitrust laws) are now looking at non-solicitation agreements between firms that don’t at first blush appear to be competitors.

From the article:

“In October 2016 the DOJ and the Federal Trade Commission issued an Antitrust Guidance for Human Resource Professionals. The Guidance made a simple and important point:

Firms that compete to hire or retain employees are competitors in the employment marketplace, regardless of whether the firms make the same products or compete to provide the same services.”

The focus is on competition for talent and labor, not competition for customers. The DOJ and private parties have initiated several legal actions alleging agreements among companies not to recruit or hire each other’s employees. These include lawsuits against major tech companies and lawsuits against franchise operations. Most recently, the DOJ criminally indicted Surgical Care Affiliates, a unit of Optum, mentioning “various companies and individuals” as co-conspirators.”

(The bolded text is in the original).

Please read the article: https://www.constangy.com/employment-labor-insider/antitrust-in-the-labor-market

Conclusion:

So-called “no-poaching” clauses can appear in everything from independent contractor agreements to professional services contracts.

Companies whose agreements contain such clauses need to consult with business-savvy lawyers who are licensed in their home states for help tailoring or removing those clauses as warranted.

Thank you!

Michael Oswald

michael@msochartered.com

www.msochartered.com

Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.

© 2021 Michael S. Oswald

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