Non-competition obligations are applied differently (or not at all) depending on a number of factors, including state law, the restrictive nature of conditions and firms considered competitive. If your company is currently using an NCC (or considering implementing it) when employing employees, here are a few questions to ask: Illegal no-poach agreements should not be written in writing or formally. Informal oral discussions at conferences, emails or texts, gentlemen`s agreements and well-known “head knocks” were all deemed sufficient to violate antitrust laws. Evidence that competitors discussed limiting or recruiting staff (including third-party intermediaries) combined with evidence of parallel conduct limiting compensation or hiring staff may allow a judge or jury to infer the existence of an illegal agreement. In the end, employers, even if they are comfortable with the conditions of competition, may feel more comfortable, ultimately having an impact on workers` ability to earn a living, which would play a role in any legal assessment of any of these agreements. Unless your company has a valid and demonstrable reason for implementing an NCC, and your state allows enforcement, you`re probably better off controlling them completely. The division then filed a declaration of interest in a private non-poach case, claiming that Duke University and the University of North Carolina had reached an agreement not to poach the other`s medical school. Statement of Interest of the United States, Seaman, et al. v. Duke University, et al., 15-cv-00462 (M.D.N.C March 7, 2019). In the summer of 2018, a coalition of more than a dozen attorneys general (California, Illinois, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and the District of Columbia) sent letters to eight franchise-based national fast food chains, demanding information about their franchise agreements and no-poaching clauses. Many of these companies then agreed to abandon their non-poaching clauses.
On July 17, 2018, you`ll find an informative overview of public arguments related to non-poaching agreements in franchised companies in Knowledge@Wharton Article and Podcast from the University of Pennsylvania Wharton School of Business with the article “How fair are non-poaching agreements – or legally?” In 2016, the FTC and DOJ released the Antitrust Guidance for Human Resource Professionals. The agencies note that “agreements between employers not to hire certain employees or to compete with the terms of compensation are illegal.” The guide continues:  Leah Nylen, number of “shocking” agreements discovered by the DOJ, says MLex Market Insight, May 17, 2018.