• FTC and DOJ Issue Antitrust Guidelines for HR
  • November 17, 2016
  • Law Firm: Shawe Rosenthal LLP - Baltimore Office
  • The Federal Trade Commission and Department of Justice issued joint guidance for HR professionals and other managers on how antitrust laws apply thiring and compensation decisions.

    In the announcement of the guidance, the FTC and DOJ note that employees are harmed “if companies that would ordinarily compete against each other trecruit and retain employees agree tfix wages or other terms of employment or enter intso- called ‘no- poaching’ agreements by agreeing not trecruit each other’s employees.”

    The guidance provides information about the prevention of violations and reporting unlawful activity tthe FTC’s Bureau of Competition or the DOJ’s Antitrust Division’s Citizen Complaint Center. It alsdiscusses how antitrust laws apply tthe sharing of information about wages and other sensitive matters between competing employers.

    Of particular note, the guidance makes the following points:

    - Agreements not trecruit certain employees or not tcompete on terms of compensation are illegal.

    - While the guidance recommends that employers not share sensitive information about the terms and conditions of employment with competitors, it alsrecognizes the ability tdesign and create legally- permissible information exchanges. Such lawful exchanges may be lawful, for example, if:
    • A neutral third party manages the exchange,
    • The exchange involves information that is relatively old,
    • The information is aggregated tprotect the identity of the underlying sources, and
    • Enough sources are aggregated tprevent competitors from linking particular data tan individual source.
    The guidance alsinforms companies that they can consult the DOJ’s Antitrust Division for guidance through its business review process or the FTC tobtain an advisory opinion regarding the proposed sharing of compensation or other terms and conditions of employment. Additionally, the guidance provides some questions and answers about situations HR professionals may encounter that could potentially implicate antitrust concerns.

    The DOJ and FTC alsissued a quick reference card summarizing the resources available tHR, and noting red flags for HR professionals. This non- exhaustive list of red flags is as follows:

    - Agree with another company about employee salary or other terms of compensation, either at a specific level or within a range.

    - Agree with another company trefuse tsolicit or hire that other company’s employees.

    - Agree with another company about employee benefits.

    - Agree with another company on other terms of employment.

    - Express tcompetitors that you should not compete toaggressively for employees.

    - Exchange company- specific information about employee compensation or terms of employment with another company.

    - Participate in a meeting, such as a trade association meeting, where the above topics are discussed.

    - Discuss the above topics with colleagues at other companies, including during social events or in other non- professional settings.

    - Receive documents that contain another company’s internal data about employee compensation.