Corporate Counsel (02/15/12) David Stanoch; Carolyn Budzinski
Lawsuits filed by the U.S. Department of Justice in 2010 against high-tech companies and a related private class action lawsuit filed in 2011 highlight that antitrust laws apply not only to products and services but also to employers’ hiring practices. Noncompete agreements between employers and employees have not been deemed anticompetitive, but the DOJ investigations take issue with agreements between competing employers that hinder competition and restrict employees’ access to better job opportunities.
A lawsuit filed by DOJ against Adobe, Apple, Google, Intel, Intuit, and Pixar challenged agreements that prevent them from contacting employees of another company unless the employee applied for a job opening. A separate lawsuit filed against Lucasfilm Ltd. centered on an agreement with Pixar that ensured the current employer would be notified of job offers to employees by the other firm and prevented either firm from counteroffering above the initial offer.
Experts say these lawsuits highlight the need for companies to consider how antitrust laws affect hiring practices. They should consider whether their employment practices involve agreements with competitors; whether their practices limit current or former employees’ mobility or salary, among other things; and the positions of their board members and officers outside the company.