The Department of Justice’s top antitrust official announced that criminal charges against companies who agreed not to hire one another’s employees will be forthcoming, with announcements to be made in the coming months.
This past week the FTC and DOJ issued an 11-page guidance document aimed at protecting employees against anticompetitive conduct with respect to naked wage-fixing and agreements, in which companies agree on salary or other terms of compensation, and anti-poaching agreements. The guidance to human resource (“HR”) professionals and hiring managers relates to both hiring and compensation decisions.
The government’s guidance makes clear that naked wage-fixing agreements and anti-poaching agreements, in which companies agree not to recruit each other’s employees, are illegal under U.S. antitrust laws and, moving forward, DOJ will criminally investigate both individuals and companies suspected of their violation. There is a carve-out for legitimate collaboration between employers. The most common form of relevant, legitimate collaboration would be a joint venture between two companies, as these are not considered per se illegal under the antitrust laws.
Continue Reading FTC, DOJ Issue Guidance for HR Professionals on the Application of Antitrust Law to Hiring and Compensation
The Fifth Circuit held recently that the State of Texas had standing to sue the Equal Employment Opportunity Commission (“EEOC”) over the Commission’s “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII” (the “Guidance”) issued in April 2012, which warned employers that blanket policies against hiring felons could disproportionately exclude minorities and thus be deemed discriminatory. Texas originally sued the EEOC in late 2013 seeking an injunction against enforcement of the Guidance and a declaratory judgment that state agencies be allowed to maintain their policies, as instituted under state law, barring categories of convicted felons from state employment. In its complaint, the State also claimed that the EEOC’s Guidance improperly preempted state law. The lower court granted the EEOC’s motion to dismiss on grounds that Texas lacked standing to sue the EEOC because the Commission cannot bring an enforcement action against the state for failing to comply with the Guidance. The lower court also held that the EEOC Guidance did not constitute a “final agency action” under the Administrative Procedure Act (“APA”), and thus the Guidance was not subject to judicial review.
On March 1, 2016, the Securities and Exchange Commission (“SEC”) settled administrative charges against a popular telecommunications equipment supplier, Qualcomm Incorporated, under the Foreign Corrupt Practices Act (“FCPA”). According to the SEC, in addition to unlawfully providing meals, gifts and entertainment to foreign officials in an effort to win new business, Qualcomm also offered full-time employment and paid internships to family members and friends of foreign government officials in an effort to curry favor. In some cases, it appears these friends and family members would not have otherwise qualified for employment at Qualcomm and special accommodations were made to hire them. To settle the case, Qualcomm agreed to cease and desist from future violations, paid a $7.5 million civil monetary penalty and agreed to other heightened compliance measures.