- DOJ and FTC’s Antitrust Division Issue Hiring and Compensation Guidance for Human Resource Professionals
- December 21, 2016 | Author: James I. Serota
- Law Firm: Greenberg Traurig, LLP - New York Office
On Oct. 20, 2016, the United States Department of Justice, Antitrust Division and the Federal Trade Commission issued antitrust guides for human resource professionals. The guides are intended to alert human resource professionals and others involved in hiring and compensation decisions to potential violations of the antitrust laws. In connection with this guidance the Federal Enforcement Agencies issued the following “red flags for employment practices”:
- agreeing with another company about one or more employees salaries or other terms of compensation;
- agreeing with another company to refuse to solicit or hire another company’s employees;
- agreeing with another company about employee benefits;
- agreeing with another company on terms of employment;
- discouraging competitors from competing too aggressively to recruit employees;
- exchanging company-specific information about employee compensation or terms of employment with another company;
- participating at a meeting such as a trade association, where the above topics are discussed;
- discussing the above topics with colleagues at other companies, including during social events;
- receiving documents that contain another company’s internal data about its employee compensation.
These warnings and guidelines are particularly significant for professionals engaging in mergers and acquisitions. Even if participants in an information exchange are parties to a proposed merger acquisition, there is antitrust risk if the shared information is about terms and conditions of employment. In view of this guidance and red flags, parties engaging in merger discussions, drafting of letters of intent, or due diligence activities should use particular care in sharing information regarding employment data, as the government has explicitly warned that the sharing of information (particularly where it is not specifically limited to what is necessary to complete the merger and acquisition discussion or acquisition) may be subject to criminal prosecution.