No-poaching agreements are agreements among rival employers to not recruit or hire another firm’s employees. These agreements affect the price of an input and harm the employee in the form of lower compensation. A number of high profile no poaching cases have been brought by the government and private parties, alleging hiring practices that include information exchange and agreements not to hire. In 2016, the antitrust agencies released guidelines targeted to human resource professionals, outlining impermissible agreements that harm employees and their compensation in the labor market. The agencies stated that they will seek criminal litigation and penalties for those involved in naked agreements that harm employees. No poaching agreements are anticompetitive and cause harm to employees in the form of decreased job mobility, reduced bargaining power, and reduced compensation. Such agreements restrict the information available to employees and exacerbate information asymmetries. Agreements to not compete on this dimension of hiring employees should be considered per se illegal and employees should be eligible to recoup damages from undercompensation.
By Christine Piette Durrance1
Agreements to fix prices by sellers of a good or service have long been considered naked restraints of trade.2 Collusion on price is a violation of Section 1 of the Sherman Act and is judged under a per se standard as price fixing is unambiguously harmful to consumers....