EMPLOYMENT LAW ANTITRUST ISSUES–RESTRICTIVE COVENANTS TAKEN TO THE NEXT LEVEL!
Presentation to Fish Law Firm Internal CLE Lunch (January 19, 2021)
Overview of Antitrust Employment Law Claims:
- High Tech Employee Settlement: A Settlement of $415,000,000 with Adobe, Apple, Google, and Intel in a class action lawsuit. The complaint alleged that the conspiracy among defendants restricted recruiting of each other’s employees by allegedly making: (1) agreements not to recruit each other’s employees; (2) agreements to notify when making an offer to another’s employee; and (3) agreements that, when offering a position to another company’s employee, neither company would counteroffer above the initial offer.
- VHS of Michigan, Inc. Class action brought by nurses alleging that Detroit-area hospitals entered into no-poach agreements; settled for $90 million.
- Franchise cases (Jimmy Johns, Burger King, etc)
- Department of Justice Enforcement Actions
- The Antitrust Division of the DOJ and the
FTC issued “Antitrust Guidance for Human Resource
Professionals”–disclosed intent to proceed criminally against
these agreements because they allegedly eliminate competition.
- The Antitrust Division of the DOJ and the
Overview of Law:
–Designed to encourage competition. The level of analysis makes a key difference in the outcome:
Rule of Reason Analysis: Balances pro-competitive and anticompetitive effects. Proof of market power/defining a relevant market.
Ancillary Restraints: Restraints that are “reasonably necessary” to a separate, legitimate, procompetitive—analyzed under the rule of reason.
Per Se Analysis: “Naked” no-poach and wage fixing agreements are per se illegal and subject to criminal penalties. (anticompetitive presumed; no balancing of pro-competitive effects).
Issue Spotting:
- Two unrelated employers agreeing not to hire each other’s workers
- Unrelated employers agreeing not to bid against each other for hiring
- Carving up the marketplace of customers.
For more information, see: “No More No-Poach”: An Antitrust Plaintiff’s Guide (wlu.edu)
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