A particular type of collusive practice is the so called “no poach agreement” by which the companies agree to refrain from “solicitating, hiring, recruiting one another’s employees” renouncing to compete for that input-i.e. employees’ labour.

On one side, at the USA level, as noted by the US “From an antitrust perspective, firms 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”.

Details: Judgments were issued in the United States in 2010 against some high-tech companies that entered into agreements not to solicit each other’s employees or to limit their hiring of the competitor’s employees.

More details here

On the other side, in EU, agreements to fix wages or working conditions, to exchange information to coordinate on these parameters, are typical forms of collusion.

Sharing information with competitors about salaries (that are in fact costs of the companies) and other working conditions may amount to tacit coordination.

The United Kingdom, France and Italy recently imposed fines for price-fixing in the fashion modelling sector. All treated as by object restrictions by competition authorities.

More details, here and here

However, difference should be made between:

  • Wage fixing or no-poaching agreements that are qualified as ‘naked’, i.e. standalone agreements that are not ancillary or reasonably necessary for another transaction, concluded directly between employers or via an intermediary, which are per se illegal and
  • those that are ancillary or reasonably necessary for another transaction (merger transaction).

By Mihaela Ion