The U.S. Department of Justice is issuing a stern warning, as well as the offer of guidance, to companies that might consider engaging in illegal “no poaching” or wage-fixing deals with competitors.
“Workers are entitled to the benefits of a competitive market for their services,” the department said in a statement.
“They are harmed if companies that would ordinarily compete against each other to recruit and retain employees agree to fix wages or other terms of employment or enter into so-called "no-poaching" agreements by agreeing not to recruit each other’s employees.”
In addition to that, going forward, it intends to criminally prosecute companies that engage in such practices. The department says it plans to offer information to human resource professionals on how to comply with the law.
While HR personnel are probably not the ones most often devising wage-fixing policies, they are often responsible for implementing illegal practices approved by company leaders. The Justice Department is encouraging HR officials to identify illegal practices and report them.
In the past, the Justice Department has mostly gone after anti-competitive practices with lawsuits, not criminal complaints. In 2010, it targeted a number of prominent Silicon Valley companies for engaging in what it alleged was an agreement between executives to not recruit each other’s employees.
Indeed, a number of emails sent by the late Steve Jobs showed the founder of Apple emailing Eric Schmidt, CEO of Google, asking him why an Apple employee had been contacted by a Google headhunter. Schmidt apologized and informed Jobs the Google recruiter had been fired in response. Jobs responded with a smiley face.
Related: What about wage insurance?
While the Justice Department settled its suit with a number of companies, employees of Apple, Google, Adobe and Intel separately filed a suit in 2013 alleging their wages had been suppressed by the illegal no-poaching agreement. The four companies agreed to a $415 million settlement last year, while a number of other tech companies allegedly ensnared in the conspiracy agreed to pay smaller amounts.
The 11-page document provided by the Justice Department includes a Q&A about how HR personnel can avoid running afoul of the law.
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