During 2018, many U.S. companies saw their employment practices come under intense antitrust scrutiny. On the federal level, the U.S. Department of Justice (DOJ) prosecuted multiple companies for entering into naked “no-poach” agreements, where companies that compete for the same employees agree not to recruit or hire each other’s employees. In addition, the Federal Trade Commission (FTC), along with the Texas Attorney General’s office, brought an enforcement action against a therapist staffing company, its owner, and the former owner of a competing staffing company for participating in a wage-fixing scheme, where the defendants agreed to lower their employees’ wages to the same level and thereafter attempted to convince other competitors to do the same in order to avoid losing employees to companies that pay higher wages.
On the state level, a number of State Attorneys General formed a coalition that has been systematically going after the no-poach clauses in corporate franchise agreements, which typically prohibit franchisees from hiring employees directly from the franchisor or other franchisees for up to six months following the end of an employee’s tenure. To date, nearly 40 national chains in various industries have entered into settlements which require them to remove such clauses from their standard franchise agreements.
