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Do Your Employment Practices Violate Antitrust Law?
Did you know that certain employment practices could violate antitrust law? This is the message to be gleaned from joint guidance recently issued by the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division (collectively, the “Agencies”). The Agencies issued this guidance to remind employers that, like any other market, the job market is subject to antitrust laws. Not only could failure to abide by the antitrust laws result in significant civil penalties, but criminal prosecution is even a possibility!
One very important point that emerges from the guidance is the Agencies' very broad view of what employers are considered “competitors” for antitrust purposes: “[F]irms that compete to hire or retain employees are competitors in the employment marketplace, regardless of whether the firms make the same products or compete to provide the same services.” Thus the issue is the talent a company seeks, not its business.
For example, a computer professional could go to work for a financial services company to help operate the specialized financial software that it uses, or he/she could work for the computer company that develops the software in the first place and acts as a vendor to the financial services company. He/she could also work for an accounting firm or other consulting firm using this type of software. All these employers would consider themselves in entirely different markets. However, the Agencies would likely consider these companies to be competitors in the employment marketplace precisely because all of them could hire this same employee. Thus, if these companies agree not to target each others' employees/candidates, they may in fact violate antitrust laws.
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