Can an enterprise agree with its competitors not to hire each other’s employees without violating antitrust laws? Like any other practice of an enterprise, hiring practices may also violate antitrust laws. From an antitrust perspective, enterprises competing against each other to hire or retain employees are competitors in the employment marketplace irrespective of whether they sell the same product or provide the same services. Therefore, any agreement between employers, expressly or implicitly, agreeing not to hire each other’s employees, even if done to reduce costs, may violate antitrust laws.
With increasing protectionist barriers around the globe, companies are rushing to find new opportunities to expand and grow. As a result, competition among companies is unavoidable. This competition is not limited to goods or services offered by these companies and may extend to the hiring of employees, especially in industries where skilled talent is required. Companies have a collective interest to eliminate this competition by forming a no-poaching agreement amongst themselves, which restricts hiring each other’s employees. However, no-poaching agreements may be in violation of antitrust laws as they impose restrictions on employees to pursue other jobs, as well as limiting their remuneration.
The Hong Kong Competition Commission (HKCC) has highlighted this issue by publishing an Advisory Bulletin: ‘Competition concerns regarding certain practices in employment marketplace in relating to hiring and terms and conditions of employment’. Before reporting some of the key findings and recommendations of the HKCC, we map the competition law developments in this area from around the globe.*
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