Non Poach Agreement

April 11, 2021

Employers who enter into non-poaching agreements with their competitors continue to risk civil and criminal liability for cartels and abuse of dominance. In addition, employers who have contractual non-employment or non-recruitment agreements with their employees run the risk that these provisions will be found to be unenforceable. For employers, especially those in Indiana, it is essential to review these agreements and, if necessary, update them. The practice of “non-poach” agreements in the fast food industry is currently under investigation after a group of 11 Democratic attorneys general announced last week that they were seeking information about them from eight fast food chains such as Arby`s, Burger King, Dunkin`Donuts, Wendy`s and Panera Bread. Franchisors have entered into these agreements with their franchisees to prevent employees from leaving a franchise to join another chain. According to Massachusetts A.G. Maura Healey, who heads the attorneys general in the case, “the agreements limit the ability of low-wage workers to seek promotions and make a better living,” according to a New York Times report. Attorneys general say 80% of fast food chains have non-poach agreements. The eight channels have until August 6 to respond. On the other hand, in the case of non-poaching agreements, the competitive advantages appear to be relatively limited. With the increasing number of investigations into non-poaching in the United States, such cases can soon become a feature of Europe. “We may see wage increases at the employee level through the signing of a non-compete clause, but at the macroeconomic level, we see that wages go down when these agreements are allowed,” Johnson said. Concentration on labour market demand is not part of the traditional centre of gravity of competition policy.

However, as explained above, non-poaching agreements can effectively harm competition in the labour market. In the United States, this prejudice has been at the centre of some recent cases; In Europe, it is not yet known whether competition authorities will consider such cases or whether labour market problems will remain secondary to product market investigations. Agreements between employers not to hire each other raise questions about the law of cartels and are “almost always illegal,” said Cappelli, who is also the director of the school`s Staff Centre. He pointed out that informal and unwritten non-poaching agreements were common among Silicon Valley technology companies and had attracted the attention of the U.S. Department of Justice. In fact, three years ago, Apple, Google, Intel and Adobe agreed to pay $415 million to settle a non-poaching complaint. At the state level, there are significant differences depending on the conditions or conditions under which the company operates. Some states, such as California, North Carolina and Oklahoma, do not comply with non-competition bans as a whole. Other states have imposed various restrictions on employers who want to impose CNs, such as the authorization of certain anti-competitive roles. B or the requirement for employers to pay workers for each week they are prohibited from working for a competitor. When it comes to transparency, workers should know that they are concerned.