Businesses are hiring at an unprecedented rate, which means they are changing how they engage and recruit new employees. This should be a boon to job seekers, but unscrupulous practices such as “no-poach” agreements can stall a promising career. A no-poach agreement is made between competing employers not to recruit or hire one another’s skilled employees. As these agreements are usually kept secret, most employees are not aware that a no-poach agreement might be in place and affecting them. Sounds innocent enough - but no-poach agreements are illegal and detrimental to employees. This practice effectively hampers career growth and can lead to employees being paid below market value for their talent, regardless of whether they actively seek other job opportunities.
When it comes to hiring, competition for highly skilled employees is intense, and some companies have better resources to pursue top talent. Those with fewer resources might resort to no-poach or wage-fixing agreements with the ambitious goal of locking down desirable candidates. But even those with the most resources have been known to engage in this illegal conduct, and in 2015 our Firm reached settlements totaling $435 million with Google, Apple, Adobe, Intel, Intuit, Pixar, and Lucasfilm, on behalf of then and former employees affected by alleged agreements among these companies not to recruit skilled employees from one another.
The Department of Justice (DOJ) has stood firm on their warnings that they will pursue criminal charges against employers entering into no-poach agreements. In 2016, the DOJ and the U.S. Federal Trade Commission issued joint guidance and multiple warnings about hiring practices and certain employment agreements in relation to no-poach practices. The DOJ gave a very stern warning: “Going forward, the DOJ intends to proceed criminally against naked wage-fixing or no-poaching agreements.” In late 2020, the DOJ brought its first-ever criminal charges concerning no-poach and wage-fixing agreements. Among those indicted were a therapist staffing company for wage-fixing and a health care staffing company for suppressing wages of school nurses through a no-poach agreement with a competitor and co-conspirator.
In January of 2021, Surgical Care Affiliates, LLC (“SCA”) was indicted for labor market collusion. The DOJ has made it clear that even employer non-solicitation agreements are in direct violation of the antitrust laws. “Under long-standing precedent, conspiracies between competitors that fall within certain established categories, including agreements to allocate markets, are per se unlawful without further inquiry. . . . Non-solicitation agreements are a type of per se unlawful market allocation.” The DOJ has left very little room for interpretation, and businesses need to be mindful of what they are asking employees to sign.
Taboola and Outbrain, which provide content recommendation services and an online advertising marketplace, are the latest targets of the DOJ’s commitment to criminally prosecute businesses that are perpetuating an anticompetitive labor market. Earlier this year, Taboola indicated in SEC corporate filings that it is cooperating with the DOJ Antitrust Division in an investigation regarding hiring practices. More recently, Taboola’s competitor Outbrain also announced that it is the subject of a similar investigation in the industry the two companies share.
The Joseph Saveri Law Firm has one of the most recognized antitrust law practices in the United States. It currently represents a proposed class of current and former employees of Surgical Care Affiliates and its co-conspirators seeking to recover suppressed wages. It is also keeping a close eye on governmental investigations into Taboola and Outbrain’s hiring practices. These potentially illegal and anti-competitive agreements may have impacted individuals who worked for Taboola, Outbrain, or any other participating competitors.
Our legal team centers its antitrust practice around maintaining healthy and legal business competition. Contact our team if you know an agreement by your past or present employer not to recruit or hire from a competitor.
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