It may seem that agreements between employers not to hire or solicit employees from each other would be illegal under the Sherman Act’s prohibition of conspiracies to fix prices or allocate markets. However, the complexity of this issue pushes the boundaries of antitrust law. But the core principals of antitrust law are tailored to reject them. In a market of employers, where firms are competitors, no-poach restraints have horizontal elements subject to a harsher standard of antitrust review. Firms that enter into these arrangements bypass legal methods to protect against the harms of employee loss, such as a non-compete agreement. Just as in a classic cartel, these firms are motivated by a desire to fix wages, and worse, weaken transparent wage information in the labor market. Possible vertical elements of these restraints, such as in franchise systems, should not alter this analysis—despite potential Copperweld or unilateralism defenses. There is a strong case in antitrust jurisprudence for per se or quick-look condemnation, including through the use of the huband- spoke conspiracy doctrine. In the case of specialized employees, in particular, extended rule of reason condemnation is possible. Once an antitrust plaintiff meets the initial burden, it will be unlikely that a defendant can raise a pro-competitive justification defense. Only in limited circumstances are no-poach agreements truly ancillary to integrations between firms, necessary for the larger venture, and pro-competitive in their purpose.
“No More No-Poach”: An Antitrust Plaintiff’s Guide,
26 Wash. & Lee J. Civ. Rts. & Soc. Just. 381
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