The US Department of Justice’s Antitrust Division recently stated that antitrust compliance programs must include training for human resources professionals on issues such as wage-fixing and no-poach agreements in order to be considered “effective.” Whether an antitrust compliance program is considered effective is important because DOJ will decline to prosecute certain conduct in some cases or will reduce penalties for companies found to have effective antitrust compliance programs.

Despite a string of losses in antitrust prosecutions involving labor practices, antitrust enforcement in labor markets continues to be an area of focus for federal antitrust enforcers. The emphasis on compliance programs is another route for the Biden administration to pursue its labor market antitrust enforcement agenda. Now is an opportune time for companies to evaluate annual updates to compliance programs and training to ensure that those programs prevent, detect, and remediate potential antitrust violations, including training for human resources (HR) professionals.

DOJ’S RECENT COMMENTS

Eric Dunn, counsel to DOJ Assistant Attorney General Jonathan Kanter, addressed DOJ’s views on effective antitrust compliance programs during a December 14, 2023 American Bar Association panel. Dunn stressed that omitting HR training from a company’s antitrust compliance program would raise genuine questions about whether such a program is “well designed” and “likely to be effective at preventing harms and potential antitrust violations.”[1]

In evaluating the design and efficacy of antitrust compliance programs, DOJ considers the following elements:

• Design and comprehensiveness of the program
• Culture of compliance within the company
• Responsibility for, and resources dedicated to, antitrust compliance
• Antitrust risk assessment techniques
• Compliance training and communication to employees
• Monitoring and auditing techniques, including continued review, evaluation, and revision of the antitrust compliance program
• Reporting mechanisms
• Compliance incentives and discipline
• Remediation methods[2]

According to DOJ’s corporate compliance guidance, the effectiveness of a company’s antitrust compliance program can impact DOJ’s decision to prosecute or resolve antitrust investigations.[3]

Dunn’s comments follow DOJ’s largely unsuccessful efforts to prosecute alleged no-poach agreements as criminal violations of the Sherman Act. In 2023, DOJ suffered a third consecutive no-poach trial loss when a Connecticut federal judge granted a motion for a judgment of acquittal at the close of DOJ’s case in chief.^[4] Despite these losses, DOJ appears to be steadfast in its resolve to bring additional criminal prosecutions in this area.

INCORPORATING HR INTO ANTITRUST COMPLIANCE

It has now been more than seven years since DOJ and the Federal Trade Commission (FTC) issued their landmark joint antitrust guidance for HR.[5] The guidance highlights that competitors for labor are not necessarily just firms that produce the same products or provide the same services.[6] The guidance also sets forth DOJ and FTC’s position that “naked” no-poach and wage-fixing agreements are per se unlawful under US antitrust law.[7]

In conjunction with the 2016 guidance, DOJ and FTC issued a list of “red flags” for HR professionals to better help them spot potential antitrust violations.[8]

These red flags warn professionals to be on the lookout for agreements with other companies regarding salary or other compensation, employee benefits, or terms of employment, as well as agreements to refuse to solicit or hire another company’s employees.[9] The list of red flags also cautions against expressing to competitors that “you should not compete too aggressively for employees.”[10]

According to the guidance, HR professionals should refrain from exchanging company-specific information about employee compensation or other terms of employment with another company; among other things, HR professionals should not share internal data about employee compensation with other companies.[11]

Finally, the red flags warn employees not to participate in any meetings where these topics are discussed, and to refrain from discussing these topics with colleagues at other companies, including during social events or in other nonprofessional settings.[12]

While the list of red flags is not exhaustive, it provides a roadmap to develop a successful antitrust training program for HR professionals.

TAKEAWAYS AND NEXT STEPS

Despite DOJ’s recent trial losses in the antitrust labor space, the costs of potential antitrust prosecutions (and follow-on civil litigation) remain high. The proverb popularized by Benjamin Franklin that an ounce of prevention is worth a pound of cure is certainly true of antitrust compliance—doubly so if DOJ credits a compliance program in reducing charges or declining to prosecute altogether.

As we set forth into the new year, companies are well advised to review their corporate compliance programs with experienced antitrust and compliance counsel to ensure that those programs are effective and well designed in the eyes of state and federal enforcers.

[1] Chris May, HR Decision-makers Need Antitrust Training, Guidance, US DOJ Official Says, mLex (Dec. 14, 2023).

[2] US DOJ, Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations 3-4 (July 2019).

[3] See id. at 2; see also US DOJ, Evaluation of Corporate Compliance Programs (Mar. 2023).

[4] United States v. Patel, No. 3:21-cr-220 (VAB), ECF No. 599 (D. Conn. Apr. 28, 2023) (granting defendants’ motion for acquittal).

[5] DOJ & FTC, Antitrust Guidance for Human Resource Professionals (Oct. 2016).

[6] Id. at 2.

[7] Id. at 3.

[8] DOJ & FTC, Antitrust Red Flags for Employment Practices (Oct. 2016).

[9] Id.

[10] Id.

[11] Id.

[12] Id.

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