In the past month, the U.S. Department of Justice (DOJ) has made good on its 2016 threat, contained in its Antitrust Guidance for Human Resource Professionals (“Antitrust Guidance”) to bring criminal charges against people or corporations who enter into naked wage-fixing agreements or naked no-poach agreements.   First, as reported here, on December 9, 2020, DOJ obtained an indictment against the president of a staffing company who allegedly violated Section 1 of the Sherman Act by conspiring with competitors to “fix wages” paid to physical therapists (PT) and physical therapist assistants (PTA).  Although not mentioned in the indictment, a related
Continue Reading Less Than a Month After DOJ Brings Its First Wage-Fixing Indictment, DOJ Brings Its First “No-Poach” Indictment

Earlier this month, the U.S. Department of Justice (“DOJ”) announced that a federal grand jury in Texas indicted Neeraj Jindal, the former owner of a physical therapist staffing company, in connection with an illegal wage-fixing conspiracy to depress pay rates for physical therapists (“PTs”) and physical therapist assistants (“PTAs”) who travel to patients’ homes or assisted living facilities in the greater Dallas-Fort Worth area.  The indictment was something of a landmark for the U.S. Department of Justice (“DOJ”), which for years had promised that such criminal prosecutions were forthcoming in connection with its ongoing investigations of illegal no-poach and wage-fixing
Continue Reading With Wage-Fixing Indictment, Department of Justice Initiates Long-Promised Criminal Proceedings

On March 12, 2019, Dunkin’ Donuts, Arby’s, Five Guys Burgers and Fries, and Little Caesars agreed to stop including “no-poach” clauses in their franchise agreements and no longer to enforce such clauses in existing agreements. A no-poach clause is an agreement between employers not to hire each other’s employees. The franchisors agreed to end this practice following an investigation by a coalition of attorneys general from 14 states into the use of no-poach clauses in fast food franchise agreements.[1] In a press release announcing the settlement, Maryland Attorney General Brian Frosh explained his concern “that no-poach provisions make it
Continue Reading No-Poach Clauses in Franchise Agreements: Four More Franchisors Agree to Drop Them and the DOJ Weighs In on Class Actions Alleging Antitrust Violations

States across the country have been using enforcement actions, legislation, and interpretive guidance to limit employers’ ability to enforce restrictive covenants against low wage workers. The recent decision in Butler v. Jimmy John’s Franchise, LLC et. al., 18-cv-0133 (S.D. Ill. 2018) suggests this trend may extend to federal antitrust law.

The Butler case relates to the legality of certain restrictive covenants in Jimmy John’s franchise agreements.[1] The Complaint alleges that Jimmy John’s required franchisees to agree not to hire any job applicants who worked for a different Jimmy John’s franchise in the previous year. Franchisees
Continue Reading Recent Decision Questions Use of No-Poach Clauses in Franchise Agreements

On April 3, 2018, the Department of Justice Antitrust Division (“DOJ”) announced that it had entered into a settlement with two of the world’s largest railroad equipment manufacturers resolving a lawsuit alleging the defendant employers had entered into unlawful “no-poach” agreements.  The DOJ’s Complaint, captioned U.S. v. Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp., 18-cv-00747 (D. D.C.) alleges that three employers referred to as Knorr, Wabtec and Faively,[1] unlawfully promised one another “not to solicit, recruit, hire without approval, or otherwise compete for employees.”  It goes on to allege “[t]hese no-poach agreements denied American rail industry
Continue Reading DOJ Antitrust Division Follows Through on Warnings Regarding Antitrust Scrutiny of Employer Non-Solicitation Agreements

Featured on Employment Law This Week:  No relief is expected from the Trump administration on anti-poaching agreements.

2016 guidance from the DOJ and FTC put employers on notice that agreements between companies not to poach employees, or to limit the compensation paid to some employees, could violate antitrust laws. There had been some speculation that President Trump’s DOJ would back away from this policy, but recent comments by the Assistant Attorney General for the Antitrust Division indicated that new administration will support the policy, and promised several announcements in the coming months.

Watch the segment below and read our
Continue Reading Trump Continues Obama Antitrust Guidance for HR Professionals – Employment Law This Week

On October 20, 2016—just about three weeks before the presidential election won by Donald Trump—the Department of Justice and the Federal Trade Commission issued a remarkable document, entitled “Antitrust Guidance for Human Resources Professionals,” which outlined an aggressive policy promising to investigate and punish employers, and even individual Human Resources employees, who enter into unlawful agreements concerning recruitment or retention of employees.  As stated in that document, “[a]n agreement among competing employers to limit or fix the terms of employment for potential hires may violate the antitrust laws if the agreement constrains individual firm decision-making with regard to wages, salaries
Continue Reading Antitrust Action Against No-Poaching Agreements: Obama Policy to Be Continued by the Trump Administration

Consider the following scenario that was the premise of the book Charlie and the Chocolate Factory (1964), and later adapted into the classic film Willy Wonka & the Chocolate Factory (1971): your company (Willy Wonka Chocolates) is in the candy business and develops an idea for an everlasting gobstopper (a sucking candy that never gets smaller).  Anticipating substantial profits from the product, the company designates the everlasting gobstopper formula as a trade secret.  As in the book and film, a rival chocolate company (Slugworth Chocolates) seeks to steal the trade secret formula in order to develop and market a competing
Continue Reading Secrets to Protecting Trade Secrets Abroad

The top story on Employment Law This Week: The DOJ intends to investigate anti-competitive trade practices.

The Department of Justice and the Federal Trade Commission released joint guidance for HR professionals on how antitrust laws apply to employment. The guidance explains that agreements among employers not to recruit certain employees—or not to compete on terms of compensation—are illegal. Notably, the DOJ announced that they plan to criminally investigate “naked no-poaching or wage fixing agreements” that are unrelated to legitimate collaboration between businesses. In the past, both agencies have pursued civil enforcement. Peter Altieri, co-editor of this blog and a Member
Continue Reading DOJ and FTC Release Antitrust Guidance for Human Resource Professionals – Employment Law This Week

Political winds disfavoring non-compete agreements for low wage and rank-and-file workers continue to blow, and appear to be picking up speed.

On October 25, 2016, the White House took the unusual step of issuing a “Call to Action” to states regarding non-compete agreements, as part of the President’s initiative to stoke competition across the economy.  Calling non-competes an “institutional factor that has the potential to hold back wages and entrepreneurship,” the Call to Action seeks to reduce the misuse of non-compete agreements nationwide.

President Obama called on state policymakers to join in pursuing best-practice policy objectives, including:

  1. Banning


Continue Reading White House Call to Action Could Spur More States, Including New York, to Act Against Non-Competes