Human Resources

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CHAPTER XXIII

HUMAN RESOURCES

A. The Intersection of Antitrust and Human Resources

As a general matter, outside of labor union collective bargaining,

employers (at least within the same industry and geographic area) are

deemed to compete with one another for the services of employees, and

employees (at least within the same industry and geographic area) are

deemed to compete with one another for employment opportunities.

Accordingly, absent some form of immunity, an agreement among

competing employees,1 or among competing employers,2 with respect to

compensation or other competitive terms of employment, is subject to

scrutiny under the Sherman Act.

Antitrust compliance programs should be designed to include human

resources (HR) management and provide specific guidance on

permissible and non-permissible conduct involving HR personnel and

their counterparts in other companies, whether in the context of bilateral

agreements, trade associations, or any other discussion forums. Guidance

provided in the premerger context should also cover the sharing of

competitively sensitive information related to HR management, such as

employees’ wages and benefits. Although the U.S. enforcement agencies

have taken the lead in scrutinizing employment practices, compliance

programs for multinational companies should address employment

practices that potentially violate competition laws not only in the United

States but also in other jurisdictions, particularly in Europe.

1. See, e.g., Loewe v. Lawlor, 208 U.S. 274 (1908) (Pre-Clayton Act,

finding that a boycott organized by workers to force an employer to

unionize fell under the Sherman Act).

2. U.S. DEP’T OF JUSTICE & FED. TRAD E COMM’N, ANTITR UST GUIDANCE

FOR HUMAN RESOURCE PROFESSION ALS 3 (2016) [hereinafter HR

GUIDANCE], available at https://www.justice.gov/atr/file/903511/

download; Beltran v. InterExchange, Inc., 176 F. Supp. 3d 1066 (D. Colo.

2016); In re High-Tech Employee Antitrust Litig., 856 F. Supp. 2d 1103,

1122 (N.D. Cal. 2012).

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Overall, compliance programs should instruct HR personnel:

• Not to share competitively sensitive information such as wages

and other terms of employment with another company (except in

the context of a third-party survey subject to antitrust counsel’s

prior review);

• Not to agree on competitively sensitive terms of employment

with another company under any circumstances;

• Not to agree with another company not to solicit or hire that

other company’s employees (except in the context of ancillary

restraints to other legitimate commercial agreements subject to

antitrust counsel’s prior review);

• Not to agree with another company on recruiting or onboarding

practices (except for legitimate reasons that should be validated

with antitrust counsel);

• Not to coordinate employment practices and share competitively

sensitive information related to employees during due diligence

and transaction planning in the context of a transaction (except

subject to a number of safeguards that should be discussed with

antitrust counsel).

B. Application of Antitrust Laws to Agreements with Labor Unions

In furtherance of federal public policy in favor of employee

collective bargaining, the Clayton Act immunizes certain types of

agreements among labor unions and their employees from antitrust

enforcement, including collective bargaining agreements on

compensation and other terms of employment and agreements to engage

in group boycotts—i.e., strikes—in support of collective bargaining

negotiations.3 Federal law relatedly restricts the availability of

injunctions in cases challenging collective employee action with respect

to wages or other conditions of employment.4 Congress passed the

3. 15 U.S.C. §17. The Clayton Act provides, in relevant part, “Nothing

contained in the antitrust laws shall be construed to forbid the existence

and operation of labor . . . organizations . . . ; nor shall such

organizations, or the members thereof, be held or construed to be illegal

combinations or conspiracies in restraint of trade, under the antitrust

laws.” (Emphasis added).

4. 29 U.S.C. §52.