Abstract

No-poach agreements have been a focus of the antitrust enforcement agencies since 2016 when the Human Resource ("HR ") Guidance was released by the Department of Justice and Federal Trade Commission. The HR Guidance raised the stakes for businesses engaged in no-poach agreements by declaring that naked no-poach agreements would thereafter be prosecuted criminally. This new priority seemed to be primarily just talk because no criminal prosecutions were filed in the first four years following the HR Guidance. However, everything changed in January 2021 when the Department of Justice returned its first criminal indictment for a no-poach agreement. Based on statements from within the Department of Justice, this indictment is just the beginning of future criminal investigations into no-poach agreements. Businesses should now take notice of the increased risk associated with no-poach agreements and act accordingly.

Understanding this increased risk may be more important now than ever before as more businesses decide to work together to effect social change and subsequently expose themselves to antitrust risk. Recently, businesses have been able to make great strides (where Congress and others have struggled) to address some of the more salient social issues of today—issues like diversity and climate change. To do this, however, many have relied on working together with other businesses to increase their collective voice and to mitigate some of the downsides associated with moving first, a trend that seems likely to continue. This increase in cooperation between businesses creates more antitrust risk for those involved—particularly in relation to the recent emphasis on no-poach. Unfortunately, if too many joint social initiatives are shut down due to no-poach violations, it could have a chilling effect on the social progress we have been witnessing of late. 

This Note discusses the relevant law regarding no-poach agreements. The goal is to help businesses avoid the antitrust risk sure to arise when they start working together. After discussing the relevant legal principles, this Note provides some examples and recommendations that businesses can implement now to help avoid, or at least lessen, future antitrust risk.

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