United States: Ensuring Antitrust Compliance In Employee Recruitment And Compensation:

 On October 20, 2016, the Department of Justice Antitrust Division ("DOJ") and Federal Trade Commission ("FTC") (the "Antitrust Agencies") jointly issued guidance on the application of U.S. antitrust laws to human resource functions related to employee recruitment and compensation (the "Guidance"). Emphasizing the importance of maintaining a competitive work force, the antitrust agencies highlighted specific agreements and practices that are typically unlawful:

  • agreeing with other employer(s) on the level or range of salaries or other terms of compensation
  • agreeing not to solicit or hire each other's employees (so-called "no-poaching agreements")
  • exchanging information on compensation or other terms of employment where it has, or is likely to result in lower compensation or fewer employment opportunities.

Violations of U.S. antitrust laws create significant liability for companies and individuals involved, including criminal prosecution by the DOJ in appropriate cases. Federal and state antitrust enforcers also can bring civil enforcement actions and affected employees can bring class actions seeking treble damages and other remedies. While the Guidance is issued by the US Antitrust Agencies, the same principles should apply in the EU and other jurisdictions with effective competition law regimes.


  • Do not reach any agreement or understanding with competing employers regarding recruitment policies or compensation.
  • Make independent decisions regarding recruitment and compensation policies and practices affecting your company's employees.
  • Implement safeguards before sharing compensation and recruitment information with other employers to ensure that the exchange is compliant with antitrust laws.

From a compliance perspective, it is important to recognize that firms may compete to recruit and retain employees even if they do not compete in the same industry or business segment.1 Therefore, a company may have a broader set of competitors in recruiting and retaining employees, including firms they do not regard as competitors in their day-to-day business.

A summary of the Guidance is below, and you can read it in its entirety here. The DOJ and FTC also released a quick reference card that provides a list of "antitrust red flags" for companies and their HR departments to watch out for.


The Guidance highlights two types of agreements that typically raise serious concerns under the antitrust laws:

Compensation-Related Agreements: such as agreements to offer the same level or range of salaries, benefits, bonuses or severance; and agreements not to increase compensation or to limit increases to certain employees or categories of employees.

No-Poaching Agreements: i.e., agreements not to solicit or recruit another company's employees (which should be distinguished from a limited non-solicitation restriction that is related to a specific JV, merger or other collaboration).

These agreements need not be formal, written or even spoken to create liability. Circumstantial evidence such as parallel behavior (e.g., parallel movements in salaries/bonuses), coupled with inter-company communications, can lead to an inference of an unlawful agreement. The fact that employers are seeking to reduce costs or retain valued employees does not justify these practices under the antitrust laws. Indeed, in the Guidance, the DOJ warns that it may take criminal action against companies and culpable individuals that engage in agreements to restrict compensation or recruitment that are not connected to a legitimate collaboration (e.g., a joint venture or a merger).


Information exchanges between competitors have been a focus of U.S. antitrust enforcement activity and private litigation. Recently the DOJ challenged alleged exchanges of information between DIRECTV, Cox, Charter and AT&T during their ongoing negotiations to telecast the LA Dodgers Channel.2 The DOJ's complaint alleges that DIRECTV and the cable companies exchanged non-public information about their negotiations, as well as future plans to carry – or not to carry – the channel, which the DOJ alleges was a material factor in their decisions not to carry the Dodgers Channel.

Likewise, employers exchanging compensation and recruitment-related information also may raise antitrust risks. Even if they do not actually reach an agreement on salaries or bonuses they intend to pay, exchanging non-public information on salaries, bonuses or other elements of compensation or recruitment may violate antitrust laws if they result in lower compensation or fewer employment opportunities.

Information-Sharing Safeguards: The DOJ and FTC have developed safeguards that employers may use to ensure that compensation or recruitment related surveys, benchmarking exercises or similar activities are antitrust compliant.3

Key safeguards include:

  • Use a neutral third-party to manage sensitive information (e.g., current or future salaries, bonuses, benefits, incentives, severance etc.). Do not share individual companies' data directly.
  • Share only historic information (at least three months old is typically safe).
  • Include sufficient participants (at least five) so that data can be aggregated and not linked to an individual company.
  • Distribute only aggregated information to participants so that a company's individual data cannot be determined.

Joint Ventures and Mergers: Parties to a proposed merger or joint venture also should take appropriate precautions, such as use of "clean teams," to ensure that competitively sensitive information on employees is restricted to deal team members who are not involved in compensation-related decisions in areas where the companies may compete for employees.


  • Verify that any surveys, benchmarking studies or similar activities are antitrust compliant.
  • Identify other forums in which company employees participate where sensitive compensation or recruitment information may be exchanged, e.g., industry roundtables and trade associations.
  • Ensure that HR and other personnel who are involved in compensation or recruitment activities and forums receive antitrust training tailored to these issues.
  • Maintain periodic training to ensure that new hires and personnel in the "hiring lines" understand the need to maintain confidentiality of sensitive information and not to reach understandings with competitors on compensation or recruitment issues.
  • Do not limit your compliance efforts to the U.S. Most countries have similar competition law prohibitions that likely would apply to agreements and information exchanges on compensation and recruitment practices. No doubt competition agencies around the globe have taken note of the U.S. Antitrust Agencies' tough enforcement stance against these practices and may well follow suit.


1 For instance, in 2010 the DOJ sued a variety of tech companies—Adobe, Apple, Google, Intel, Intuit, and Pixar—for agreeing not to solicit one another's software engineers. Even though these companies did not necessarily compete in the same business lines, the DOJ took the view that they competed for the same pool of employees. United States v. Adobe Systems, Inc., https://www.justice.gov/atr/case/us-v-adobe-systems-inc-et-al.

2 United States v. DIRECTV Group Holdings, LLC, https://www.justice.gov/opa/press-release/file/907636/download (complaint).

3 The Guidance also made reference to the DOJ and FTC's prior guidance related to the healthcare industry. That guidance specifically recommends that any information shared be more than three months old, and that at least five companies provide data in any survey that involves sharing cost- or price- (including compensation) related data.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.