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Beware of ‘no-poach’ agreements

Jaclyn Jaeger | April 10, 2018

When rail equipment suppliers Knorr-Bremse and Wabtec struck an informal agreement not to poach each other’s employee ranks for project managers, engineers, business unit heads, and other skilled employees, senior executives at these companies reasoned that it was “a prudent cause for both companies” in a competitive market. It was also illegal.

Since October 2016, the Justice Department’s Antitrust Division has warned on numerous occasions that it will consider companies that enter into “no-poach” agreements as violating antitrust law, and they will face felony criminal charges. In an exercise of prosecutorial discretion, the agency said it will pursue as civil violations no-poach agreements that were formed and terminated before it made those announcements.

That brings us to the present case: On April 3, 2018, the Justice...

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