The latest blow to the U.S. Department of Justice Antitrust Division’s efforts to criminally prosecute “no-poach” agreements came this May 19 when U.S. District Judge Victor A. Bolden of the District of Connecticut granted the defendants’ joint motion for a judgment of acquittal in United States v. Patel. This decision represents the DOJ’s fourth significant defeat in just the past two years—the effects of which are discussed more broadly below.
What Are No-Poach Agreements
No-poach agreements are typically agreements between companies that promise not to solicit or hire each other’s employees. Antitrust criminal enforcement of no-poach agreements has been an area of increased focus for the DOJ in recent years and is currently a hotly debated issue. Although such agreements may appear innocuous, the DOJ alleges that they can have far-reaching effects on the labor market, leading to reduced wages and limited job mobility. As a result, the DOJ and the Federal Trade Commission have taken an increasingly aggressive stance on these agreements, with the DOJ pursuing criminal charges in several high-profile cases against employers for engaging in such conduct. One of the most controversial aspects of the no-poach cases is the DOJ’s position that they be considered illegal per se and treated no different than any other price-fixing case, rather than analyzed under the more fact-intensive “rule of reason” approach. Notably, the DOJ typically only criminally prosecutes per se restraints of trade.