The Department of Justice’s (DOJ) Antitrust Division recently started targeting and criminally prosecuting illegal no-poach agreements under Section 1 of the Sherman Act. A no-poach agreement refers to certain illegal agreements made between competitors not to hire or pursue each other’s employees. Prior to 2016, the DOJ and Federal Trade Commission (FTC) treated these types of non-solicitation agreements exclusively as civil offenses. In 2016, however, the DOJ and FTC jointly released Anti-Trust Guidance for Human Resource Professionals, which warned that the DOJ could pursue companies, human resource professionals, owners, or general managers for criminal violations of so-called naked no-poach agreements. In January 2021, the DOJ made good on its promise and sought its first criminal indictment against a company for allegedly agreeing with competitors to forgo soliciting each other’s senior level employees. See United States v. Surgical Care Affiliates, LLC, No. 3:21-CR-000101 (N.D. Tex. Jan. 5, 2021).
Since January 2021, the DOJ has filed several more criminal indictments against companies and employees and submitted statements of interest in ongoing private suits related to naked no-poach agreements. See United States v. DaVita, 1:21-cr-00229 (D. Colo. Jan. 28, 2022) (DOJ brought a criminal complaint against DaVita, Inc. and its former CEO Kent Thiry alleging conspiracies with other health care companies to suppress competition for the services of employees, including by entering into naked no-poach agreements); United States v. Patel, 3:21-mj-01189 (D. Conn., filed Dec. 7, 2021) (DOJ filed a criminal complaint against six aerospace executives and managers for naked no-poach agreements); United States v. Manahe, 2:22-cr-00013 (D. Me., filled Jan. 27, 2022) (DOJ filed a criminal complaint against four managers of home healthcare agencies alleging a wage-fixing and no-poach conspiracy); In re Outpatient Med. Ctr. Emp. Antitrust Litig., No. 1:21-cv-00305 (N.D. Ill. filed Dec. 9, 2021) (DOJ filed a statement of interest urging the court to reject motions to dismiss a complaint alleging that the companies agreed to not compete for each other’s employees.) No court has yet ruled definitively on whether non-solicitation agreements between competitors can be prosecuted criminally under the Sherman Act.