No poaching agreements, another competition decision

No poaching agreements continue to be a focus for competition authorities.  Have you checked your HR agreements are compliant and whether you could benefit from exceptions to the prohibition?  If there is a no poaching agreement in place, do you trust the counterparty not to blow the whistle?

No poaching agreements continue to be a focus for competition authorities.  Have you checked your HR agreements are compliant and whether you could benefit from exceptions to the prohibition?  If there is a no poaching agreement in place, do you trust the counterparty not to blow the whistle?

On 11 June, the French competition authority (Autorité de la concurrence) announced two separate fines in relation to general no-poach agreements. These practices took the form of gentlemen’s agreements aimed at prohibiting the companies in question from soliciting and hiring each other’s employees, an essential competitive parameter in the labour markets in which the companies are active.

The parties are active in the engineering, technology consulting and IT services sectors. The Autorité learned of the practices through a leniency application submitted by one of the parties in April 2018 and through dawn raids in November 2018.

The Autorité imposed a total fine of €29.5 million but the whistle-blower received full immunity from fines due to its status as a leniency applicant.

In addition, the Autorité ordered the parties to publish a summary of the decision on the social network LinkedIn, as well as in electronic and paper editions of the newspaper Le Monde Informatique.

Sanctions have been imposed for no poaching agreements over the past year in several countries, and the EU Commission is investigating no poaching agreements in several sectors, including the IT sector, having recently imposed a fine of €329 million on two companies.