The Evolution of DOJ’s Views on No-Poach Litigation
Even though the Sherman Act outlaws “every contract, combination, or conspiracy in restraint of trade,” the courts and the antitrust agencies recognize that “the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable.”1 Per se treatment of antitrust violations is, in principle, therefore reserved for the most egregious types of conduct that have no redeeming procompetitive benefits.2 In its 2016 Antitrust Guidance for Human Resource Professionals, the Department of Justice highlighted that naked “no-poach” agreements would be subject to criminal prosecution. Since then, the DOJ has attempted to broaden the scope of its criminal enforcement, including no-poach agreements that may have vertical characteristics and may be ancillary to legitimate and procompetitive collaborations between labor market competitors. In this article, we map the DOJ’s evolving position over time and discuss both the legal and economic reasons why it is improper to presume that all such agreements should be treated under a per se standard as de facto market allocation. We also discuss the outcome and consequences of the DOJ’s first two attempts to criminally prosecute no-poach conduct.
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1 See, for example, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/antitrust-laws
2 A history of the per se standard of antitrust criminality is provided in Roxann E. Henry, Per Se Antitrust Presumptions in Criminal Cases, 2021 Colum. Bus. L. Rev. 114.