Human resource professionals and others involved in hiring and pay decisions who don’t want to run afoul of antitrust laws will want to take a look at a new joint guidance issued by the Justice Department’s Antitrust Division and the Federal Trade Commission.
Employees are harmed if companies that would ordinarily compete against each other to recruit and retain employees agree to fix wages or other terms of employment or enter into so-called “no-poaching” agreements by agreeing not to recruit each other’s employees. Going forward, the Justice Department said it intends to criminally investigate naked no-poaching or wage-fixing agreements that are unrelated or unnecessary to a larger legitimate collaboration between the employers.
“HR professionals need to understand that these violations can lead to severe consequences, including criminal prosecution,” said Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division. “The guidance provides HR professionals with information to prevent violations and report potentially unlawful activity, furthering the Justice Department’s commitment to protect workers from harmful conduct that stifles competition.”
The guidance also discusses how the antitrust laws apply to firms’ decisions to share sensitive information, such as compensation information, with competing employers, either directly or through third party entities. Information sharing may violate antitrust law unless the information exchange is carefully designed to prevent harm to competition.
The agencies’ joint guidance includes a Q&A section that explains how antitrust law applies to various scenarios that HR professionals might encounter in their daily work lives. The agencies also urge HR professionals and others who have information about possible antitrust violations to contact the Justice Department Antitrust Division’s Citizen Complaint Center or the Federal Trade Commission’s Bureau of Competition.
The agencies have also issued a quick reference card that encapsulates some of this information in a convenient, index-card-sized format, which provides a list of antitrust red flags that HR professionals should look out for during their day-to-day work. The listed situations are not exhaustive, and the existence of a red flag does not necessarily imply an antitrust violation.
“Still, HR professionals should proceed with particular caution if they are confronted with any of the scenarios listed on the card,” the Justice Department’s Antitrust Division stated. “By doing so, HR professionals can play an important role in protecting employees and consumers and ensuring the competitiveness of the employment marketplace.”