In case there was any doubt about it, recent activity by the United States Department of Justice (DOJ) should serve as a sharp reminder to employers that wage-fixing and "no-poaching" agreements are illegal and subject to criminal prosecution. These agreements violate the federal antitrust laws, and the DOJ has increased prosecution of such agreements.
 
In certain industries, competition among employers for employees can be fierce and losing an employee to another employer can be expensive. To try to soften the impact of this competition, employers will sometimes seek to enter into agreements or "understandings" with other employers not to out-bid each other by offering higher wages or benefits (wage-fixing) or not to hire, cold call, recruit, or otherwise attempt to solicit each other's employees (no-poaching). Although such agreements can arise in any industry, they seem to be more prevalent in the healthcare and tech industries. And, in all industries, such agreements are now clearly in violation of the DOJ's antitrust policies.
 
The DOJ's Antitrust Division announced a new anti-poaching policy in October 2016, which made wage-fixing and no-poaching agreements illegal and potentially subjected offending employers to both civil penalties and criminal sanctions. Initially, it was unclear exactly what DOJ would do – if anything – to enforce the new policy. Then, in 2018, Assistant Attorney General Makan Delrahim announced that the DOJ had several ongoing "no-poaching" investigations under way and a criminal prosecution commenced. The DOJ has recently confirmed that it has a number of ongoing active criminal investigations against employers to determine whether there has been a violation of these laws.
 
The DOJ has provided definitions of wage-fixing and no-poaching agreements. A wage-fixing agreement arises when individual(s) at one company agree "with individual(s) at another company about employee salary or other terms of compensation, either at a specific level or within a range." A no-poaching agreement arises when individual(s) at one company agree "with individual(s) at another company to refuse to solicit of hire that other company's employees."
 
Thus, it is illegal for an employer to enter into wage-fixing or no-poaching agreements with other employers, and such behavior may subject the employers to civil penalties and criminal sanctions. But it is not only explicit agreements that are prohibited. Also prohibited are verbal agreements or "understandings" between employers. The DOJ will even question the sharing of sensitive information concerning terms and conditions of employment between employers – as this could serve as evidence of an implicit illegal agreement. It is in this "gray" zone where employers need to be especially careful. Simply having conversations with individuals at other companies about certain employment issues can create significant risk because the conversation could be considered an "understanding." Employers should avoid conversations about employment issues with other employers – especially those in the same industry – because those conversations could be construed as an agreement or understanding.
 
The DOJ's Antitrust Guidance for Human Resource Professionals provides some examples of conduct which the DOJ will view as violating the prohibition:
 

 
In each of these instances, there would be no formal agreement. However, the conduct would nonetheless violate the DOJ's prohibition on wage-fixing and no-poaching. And, though these examples seem somewhat obvious, there is concern that more subtle conversations between competitors could be deemed actionable by the DOJ.