Chiara Treglia

ABSTRACT

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Nel corso dell’ultimo decennio, è emersa una tendenza a livello mondiale nella proliferazione di accordi, cd. accordi no-poach e wage-fixing (letteralemnte, accordi “di non sollecitazione” e “di contenimento dei salari”, stipulati da (e tra) i datori di lavoro per limitare la mobilità e/o contenere i salari dei propri dipendenti. Gli accordi cd. no-poach e wage-fixing hanno attirato sempre più l’attenzione delle autorità antitrust americane, la DOJ e la FTC, che si sono contraddistinte per il marcato attivismo nella lotta contro i suindicati accordi.

Il fatto che diverse autorità nazionali della concorrenza in Stati Membri dell’Unione Europea si siano unite alla lotta contro gli accordi cd. no-poach e wage-fixing dimostra che queste pratiche sono diffuse anche nel territorio ricompreso nel raggio applicativo del diritto della concorrenza dell’Unione Europea. Ciononostante, la Commissione Europea non ha affrontato direttamente la questione, avendo preso posizione solo indirettamente. Invero, nell’ottobre 2021, Margrethe Vestager ha rivelato l’intenzione della Commissione di indagare sulle suddette queste pratiche nel mercato del lavoro al fine di scongiurare un’elusione del diritto della concorrenza. Tuttavia, non è ancora noto (quando né) come l’intenzione della Commissione verrà implementata.

Alla luce di ciò, lo scopo del presente contributo è quello di esaminare su quali basi e in che modo la Commissione europea potrebbe affrontare la proliferazione degli accordi cd. no-poach e wage-fixing, alla luce delle disposizioni dell’art. 101 del Trattato sul Funzionamento dell’Unione Europea.  

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In the last decade, a worldwide trend has emerged in the proliferation of agreements, specifically no-poach and wage-fixing agreements, entered into by and between employers to limit the mobility and/or contain the salaries of their employees. No-poach and wage-fixing agreements have increasingly attracted the attention of American antitrust authorities, primarily the DOJ and the FTC, which have shown the most marked activism in the fight against no-poach and wage-fixing agreements.

The fact that multiple EU national competition authorities have joined the fight against no-poach and wage-fixing agreements demonstrates that these practices are spread in the EU as well. This notwithstanding, the EU Commission has not directly addressed the matter, having only indirectly taken a position. To that end, in October 2021, Margrethe Vestager unveiled the EU Commission’s intention to investigate these practices in the labour market with a view to enforce competition law. However, it remains unknown (when and) how said enforcement will take place.

The purpose of this paper is thus to explore on which grounds and exactly how the EU Commission ought to deal with the proliferation of no-poach and wage-fixing agreements, in light of the provision of art. 101 TFEU.

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TABLE OF CONTENTS

  1. Introduction. 2- A preliminary step: circumscribing the phenomenon. 3- Subsuming no-poach and wage-fixing under the definition of cartels. 4- The extreme difficulty in finding a justification for job cartels. 5- Possible solutions for the European Commission. 6- Proposals for undertakings. 7- Conclusion. 8- Bibliography.
  1. Introduction

In the last decade, a worldwide trend has emerged in the proliferation of agreements,[1] specifically no-poach and wage-fixing agreements, entered into by and between employers to limit the mobility and/or contain the salaries of their employees. Throughout the years, the effects of these practices have proved to be so detrimental to competition that they could no longer be ignored.

In particular, no-poach and wage-fixing agreements have increasingly attracted the attention of American antitrust authorities. As early as 2010, the Department of Justice Antitrust Division (hereinafter “DOJ”) settled with six high-tech Silicon Valley companies – among which the giants Apple, Intel, Google and eBay – accused of having violated Section 1 of the Sherman Act, when entering into agreements not to “cold call” each other’s employees.[2] This did not prevent other firms from adopting the same kind of practices within their respective markets. Consequently, in 2016, the DOJ and the Federal Trade Commission (hereinafter “FTC”) jointly issued the so-called “Antitrust Guidance for Human Resources Professionals” (hereinafter “2016 Guidance”).[3] The main objective of this guidance is to inform recruiters that “naked wage-fixing and no-poach agreements” are “per se illegal”, and can thus be criminally prosecuted in the USA, alongside explaining the reasons behind this position.[4] The DOJ and FTC’s stance led to undertakings reconsidering their recruitment procedures, in order to ensure their compliance with antitrust law, to avoid sanctions.

The situation in the USA is certainly not a unicum around the globe. The DOJ and the FTC certainly are the authorities that have shown the most marked activism in the fight against no-poach and wage-fixing agreements. However, competition authorities from other countries have also been adopting positions in relation to these practices.[5] The fact that multiple EU national competition authorities have joined the fight against no-poach and wage-fixing agreements demonstrates that these practices are spread in the EU as well.

This notwithstanding, the EU Commission has not directly addressed the matter, having only indirectly taken a position.[6] In October 2021, Margrethe Vestager, the EU Competition Commissioner, unveiled the EU Commission’s intention to investigate these practices in the labour market with a view to enforce competition law.[7] However, it remains unknown (when and) how said enforcement will take place.

The purpose of this paper is thus to explore on which grounds and exactly how the EU Commission ought to deal with the proliferation of no-poach and wage-fixing agreements, in light of the provision of art. 101 TFEU.[8]

To that end, a preliminary analysis will be carried out to identify the definitions of, and dynamics behind, no-poach and wage-fixing agreements.  After that, it will be illustrated in detail how, from a legal point of view, these practices, adopted in the labour market, can be subsumed under the EU definition of cartels and thus why they should be treated as such. Particular attention will be paid to the extreme difficulty in finding any justification for no-poach and wage-fixing agreements. Finally, possible solutions will be examined, both for the EU Commission and for undertakings operating within the EU competition law framework.

The EU Commission has not taken a strong position in relation to no-poach and wage-fixing agreements, nor has it gathered data concerning them. Therefore, this paper will refer to the positions taken with regard to these practices by national competition authorities within the EU and, when relevant, outside the EU, alongside data and case law from the USA.[9]

No-poach agreements, wage-fixing agreements and non-compete clauses, sometimes (improperly) referred to as synonyms, are slightly different phenomena.

On the one hand, no-poach agreements, also known as “no-cold call agreements”, are agreements between undertakings not to poach each other’s employees.[10] On the other hand, wage-fixing agreements are agreements among employers to fix, or to agree on the criteria for determining, employees’ compensation or a component of it. Both no-poach and wage-fixing agreements are kept secret, especially from the employees concerned.[11]

There is a strong interconnection between no-poach and wage-fixing agreements: entering into the former allows employers to lower salaries (as they would do entering into the latter), without employees being able to switch employers. In fact, should the employees concerned apply for another position, they would not be hired by any of those who are part of the no-poach agreement. Therefore, the employees in question would have no option but to accept any condition set by their employers. The reasoning also works the other way around: if employees are paid the same salary and/or given the same benefits by different employers, it is rather unlikely that they would switch.

Non-compete agreements (hereinafter “NCAs”) are agreements between an employer and an employee, according to which the latter undertakes not to compete with the former after the termination of the employment contract.[12] In the vast majority of jurisdictions across the EU, the validity of such clauses is subject to the respect of conditions predetermined by the law.[13] These requirements aim to balance the interests of the parties involved: the employer can only impose a “duty of loyalty” on the employee for a certain limited period of time, and the employee is, in turn, entitled to a benefit or compensation for his duty.[14] In the USA, the conception of NCAs is different. In fact, in some federal states, such as California, they are void,[15] as they are considered to be against innovation.[16]    

No-poach and wage-fixing agreements, like NCAs, are widespread both in relation to high-wage and to low-wage jobs. No industry seems to be free from these agreements, which, indeed, are lately spreading in gig economies as well.[17]

Having said that, a line can be drawn between no-poach and wage-fixing agreements on one hand, and NCAs on the other. Firstly, the requirements for the validity of NCAs are set by national laws, at least across the EU. Consequently, should an employment contract contain an NCA that does not meet said requirements, the employee, once the employment contract comes to an end, could just ignore the provision in question, relying on its invalidity. Conversely, with regard to no-poach and wage-fixing agreements, employees are subject to the wills of their employers. Secondly, no-poach and wage-fixing agreements, due to their secrecy, are extremely difficult to detect, unlike NCAs, which are at least known to the employee who has signed the employment contract.[18] One of the consequences of the secrecy of no-poach and wage-fixing agreements is that it is extremely difficult to obtain updated statistics on how common these practices are in various industries.[19]

At the EU level, the definition of cartel is enshrined in art. 101(1) TFEU, from which it can be inferred that a cartel is cumulatively characterised by: (i) being a (tacit or express) agreement; (ii) being entered into among competitors; (iii) having the restriction of competition as its main objective.[20] If no-poach and wage-fixing agreements present all these features, they can be called “job cartels”.[21]

With regard to the first characteristic (i.e. being an agreement), there is no doubt whatsoever that both no-poach and wage-fixing agreements entail a “meeting of minds”, thus amounting to agreements.

With regard to the second feature (i.e. being entered into among competitors), suffice it to say that, “in a well-functioning market, employers compete to attract the most valuable talent for their needs”.[22] The labour market is indeed governed by the same laws of supply and demand of the product/service one.[23] The only difference is that in the former market labour is exchanged, whereas in the latter products or services are. Additionally, practices that are put in place in the labour market sort effects in the product/service one as well. This is due to the fact that labour is one among the factors of production that allow undertakings to be active in the product/service market. Therefore, two firms can be competitors in the labour market whether or not they are rivals in the product/service one.[24]

Having established that no-poach and wage-fixing agreements are entered into among competitors, it now remains to be demonstrated that their main objective is the restriction of competition. This can be done by comparing the aim (and effects on competition) of no-poach and wage-fixing agreements with that of some among the cartels which, by their very nature, restrict competition, pursuant to art. 101(1) TFEU.[25]  

Wage-fixing agreements certainly have the same objective as purchasing price cartels, also known as “buyer cartels”, within the meaning of art. 101 TFEU.[26] There is general consensus that buyer cartels concern the purchase of raw materials by undertakings. However, given that labour is one of the factors of production, just as raw materials are, and that wage-fixing agreements aim to set a price for labour, it follows that wage-fixing agreements restrict competition in the same way as buyer cartels. [27] In other words, firms entering into no-poach and wage-fixing agreements gain, and can exert (collectively) on the market, the same monopsony power as those colluding on raw materials.[28]

And again, no-poach agreements have the same objective as those that “limit or control […] technical development, or investment”.[29] In fact, an artificial distribution of employees among competitors generates allocative inefficiency in the labour market.[30] In other words, when parties of no-poach agreements “assign” an employee to an employer, they do so on the basis of those parties’ convenience, not in a view of functionality for technical development. This may result, for instance, in undertakings having financial resources to invest in research being deprived of human resources (i.e. the employees) to perform said research.[31] Allocative inefficiency in the labour market also causes employees not to be able to choose a working environment that would otherwise stimulate their productivity and eventually give them the chance to contribute to technical developments. This is particularly detrimental for some industries, such as tech companies, for which progress is vital. The same, and perhaps even more, can be said with respect to wage-fixing agreements: competitive salaries are a key factor in attracting workers to businesses where that particular employee’s knowledge and skills can be efficiently allocated.[32]

Furthermore, no-poach and wage-fixing agreements, reducing labour mobility, often result in the type of cartel which is better known as “customer allocation”.[33] This is particularly evident when it comes to highly qualified jobs, where intuitu personae is relevant for consumers’ choices. A relevant example is a law firm, where there is a bond of trust between lawyers and their clients. In fact, when lawyers switch to another firm, it is highly likely that their clients will follow them. Consequently, a restriction of employee mobility would result in a restriction of client mobility, which would in turn lead to a market with no competition at all. In fact, undertakings would not need to act efficiently in order to keep customers.

Another practice which, despite not being expressly mentioned in art. 101(1) TFEU, has been clarified to certainly be a way to cartelise a market is the exchange of commercially sensitive information among rival undertakings.[34] In brief, information is “commercially sensitive” when it is relevant to the strategic, financial, and/or economic data of the undertaking, and enables the recipient of the message to align his/her behaviour in the market with that of the sender.[35] Communication exchange concerning employees pertains to the strategy of undertakings, since human resources data (e.g. wages or benefits) are direct operating costs.[36] Hence, sharing this kind of information allows undertakings to eliminate the uncertainty that is intrinsic to competition, while reducing the prices paid in the labour market to maximise their profits.[37] What is particularly worrying is that the exchange of information concerning employees is a widespread practice across the EU,[38] which suggests that human resources could be convinced of the legality of this practice. A caveat is needed: sharing data pertaining to human resources is not considered anti-competitive, at least in the EU, when and only when it is done in the context of and in compliance with the limits set for collective bargaining.[39]

That being said, no-poach and wage-fixing agreements, having all the same features that characterise cartels, should be considered, and thus treated, as such.[40] Hereinafter in this paper, the phrase “job cartels” will thus be used as an elliptic expression to refer to “no-poach and wage-fixing agreements”. 

Various national competition authorities in EU Member States have reached the same conclusion, treating no-poach and wage-fixing agreements as cartels.[41] However, this approach has not been adopted by each country across the EU.[42] In other words, even if EU Member States have been looking at job cartels as an extremely problematic issue, there is no harmonisation in the way they are dealing with said practices in the labour market. This would suggest that an intervention at the EU level is necessary.

The qualification of no-poach and wage-fixing agreements as cartels cannot be the final step of this analysis. It is indeed widely known that, at least in theory, even the worst cartels, albeit rarely, can be exempted from the application of art. 101(1) TFEU, pursuant to art. 103(3) TFEU.[43] It is thus essential to analyse the main arguments that have been – or could be – put forward to justify job cartels, in order to demonstrate that they would practically never meet all the four requirements which are necessary for art. 101(3) TFEU.[44]

To begin with, it is worth recalling the impossibility of sustaining that practices adopted in the labour market lie only within labour law and fall outside the scope of competition law. In fact, Advocate General Lenz, in his opinion in Bosman, clarified that an agreement is not exempt from the application of competition law just because it pertains to the relationship between employer and employee, rejecting UEFA’s objection to that end.[45] 

Parties to job cartels concerning high-wage employees’ mobility, particularly those working in digital industries, could try to defend their conduct claiming it was necessary to preserve their business’ specific knowledge.[46] Indeed, it could be sustained that, since trade secret laws play a pivotal role for these businesses, but are very difficult to enforce, employers should be allowed to retain their key employees, entering into no-poach agreements.[47] However, this observation does not take into account the principle of necessity and proportionality, which is one of the conditions that have to be met for art. 101(3) TFEU to apply.[48] In other words, there are various ways to protect businesses’ specific knowledge, without infringing competition law, such as the implementation of internal policies and systems for the preservation of confidential information.

Some members of no-poach and wage-fixing agreements have tried to defend themselves stating that they had no choice but to collude, in order to overcome a crisis that their market was facing.[49] Once again, this circumstance is unlikely to meet the test of necessity and proportionality, referred to in art. 101(3)(a) TFEU. In fact, undertakings dealing with the same issue in the labour market could overcome it by trying to be more appealing than their rivals in the eyes of employees, instead of colluding. To that end, the EU Commission has already stated that undertakings cannot align their behaviours just because they are all facing difficulty.[50] Competition can and must be kept alive in hard times as well.

Against this backdrop, it has been pointed out that employers usually invest in the so-called “general” and “specific” training of their employees.[51] So, according to this argument, undertakings would resort to no-poach agreements so as not to allow competitors to “free ride” on their investment for an employee’s general training and to wage-fixing agreements to recover the cost of their investment in specific training.[52] This attempt to justify job cartels seems to lack pragmatism: operating a business per definition entails undertaking risk. This is not something that can be shifted by adopting anti-competitive practices.

The objections to the punishment of job cartels analysed insofar have been mainly developed with respect to highly qualified jobs. Apart from not holding, said arguments show that, if it is extremely difficult to find a justification for no-poach and wage-fixing agreements in relation to highly qualified jobs, fewer, if any, attempts can be made to find one for low-qualified jobs, where it is unlikely to find the employer’s necessity to recover money spent on training or to protect commercial secrets.[53]

This notwithstanding, it has been sustained, to defend (also) job cartels concerning low-qualified workers, that allowing competitors to cut the costs sustained in the labour market would result in a reduction of the price charged to end consumers.[54] Therefore, according to this arguments, no-poach and wage-fixing agreements could be tolerated, based on the consumer benefits that these practices generate. This view cannot be shared for at least two reasons. Firstly, there is no evidence from the USA neither from EU Member States showing that parties of no-poach and wage-fixing agreements tend to pass the benefits obtained on to consumers. Quite the contrary, it is reasonable to assume that competitors entering into job cartels have no incentive to pass gains onto consumers.[55] Secondly, the aim of competition law is neither protecting consumers nor competitors, it is to preserve “the structure of the market and thus competition as such”.[56] No-poach and wage-fixing agreements cannot thus be defended from the application of competition law alleging the possibility – which is rather unlikely indeed – of a future pass-on of their gains to consumers.

All that being said, a requirement for the application of art. 101(3) TFEU that job cartelists may find almost impossible to prove is the one contained in letter b) of said provision, pursuant to which cartels must not eliminate competition in a “substantial part” of the market concerned.[57] To that end, as shown above,[58] job cartels, by their very nature, allow undertakings to substantially restrict competition in the product/service relevant market through collusion on the price paid on one of their major inputs, i.e. employees.

This analysis has had as its subject “naked” job cartels. Indeed, as acknowledged by the DOJ and the FTC, no-poach and wage-fixing agreements are not per se illegal (meaning their legality needs to be assessed on a case-by-case basis) when they are ancillary to “larger legitimate collaboration”.[59] A caveat is needed. In the 2016 Guidance, only two circumstances constituting a “larger legitimate collaboration” are mentioned, i.e. “a legitimate joint venture” and “a legitimate merger or acquisition proposal, [provided that] appropriate precautions are taken”.[60] The fact that this “list” has not been expressly defined by the DOJ and the FTC as exhaustive has misled actors on the market to believe that it was exemplificative.[61] However, never has a job cartel in the USA been justified on different grounds with respect to the two above-mentioned ones. This has created a black area, containing what is prohibited (i.e. naked job cartels) and a grey area (i.e. “larger legitimate collaboration”). Needless to say, the circumstance in question has caused uncertainty, sometimes encouraging firms to forcefully try to put forward a justification for their behaviour, alleging the presence of (unreasonable) “larger legitimate collaborations”.[62]

To sum up, it is almost impossible to find a justification for job cartels under art. 101(3) TFEU in the EU competition law framework. To that end, one should not be deceived by the above-mentioned statement in the 2016 Guidance according to which no-poach and wage-fixing agreements may be tolerated, depending on the result of a case-by-case analysis, if ancillary to legitimate purposes. Indeed, this statement has been applied rather restrictively.

Given the detrimental impact of job cartels on competition law, and the presence of these practices across the EU, it has now to be examined how they could be eradicated in the EU marketplace.

To begin with, it has been pointed out that the battle against no-poach and wage-fixing agreements could be fought at the national level, both by competition authorities and/or by labour law legislators.[63] It is difficult to completely share this view, when having in mind the EU legal environment. Firstly, in order for harmonisation to be achieved, measures should be (well-defined and) adopted at the EU level and then implemented at the national level, so as to avoid differences in the laws of different Member States, as far as possible.[64] In fact, for those national competition authorities throughout the EU that have started enforcing job cartels, this activity has proved to be particularly difficult to carry out without any guidelines from the EU Commission.[65] Therefore, not only would the EU Commission’s intervention concerning job cartels trigger investigations on the issue by every national competition authority, but it would also provide a “stronger ground” for those authorities that are already active in the field. Secondly, leaving it solely to labour law legislators to deal with no-poach and wage-fixing agreements would equal to recognising that these practices are outside the scope of competition law, which, as previously shown,[66] does not correspond to the truth. It follows that it is the EU Commission that ought to take a position with respect to job cartels.

The first step would be for the EU Commission to issue guidelines concerning no-poach and wage-fixing agreements, classifying them as cartels. To that end, inspiration could be taken from the 2016 Guidance by the DOJ and the FTC.[67] This Guidance indeed, being addressed to human resources personnel, is extremely clear in explaining which practices can be considered job cartels, based both on the dynamics with which they are put in place and on their effects.[68] Clarity in this type of guidelines is of vital importance, since job cartels can even be realised into through a “naïve” conversation among recruiters of rival firms concerning how to deal with personnel shortages or how to structure employee benefits.[69]

Another aspect of the USA 2016 Guidance that would be advisable to reproduce in guidelines issued by the EU Commission is a brief illustration of the legal consequences of entering into job cartels.[70] It may be argued that providing undertakings with this kind of information in the EU would not have the same deterrent effect it had in the USA. In fact, cartels can be only civilly fined in the EU, whereas they can be criminally prosecuted under American antitrust law. However, it is widely known that, even for those undertakings for which paying a fine is not a big problem, reputation is a huge concern. Since, most of the time, being fined by the EU Commission entails a bad reputation, fines in the EU could act as a deterrent, almost as effectively as sanctions for breaches of antitrust law.[71]

In issuing its guidelines, not only should the EU Commission emulate the DOJ and FTC, but it could also learn from their “mistakes”. For instance, case law from the US seems to show that, despite the wording of the 2016 Guidance, the two types of “larger legitimate collaboration” (i.e. a partnership and, under certain circumstances a merger) included therein are the only cases in which a no-poach and/or a wage-fixing agreement can be analysed on a case-by-case basis.[72] The EU Commission could, instead of creating “grey areas”,[73] insert in its guidelines a list of circumstances in which no-poach and wage-fixing agreements can be considered ancillary to a legitimate purpose (and might thus eventually be tolerated), qualifying said list as exhaustive and not exemplificative. It is true that, given the constant evolution of practices adopted in the market, the EU Commission could have to, from time to time, add new items to said list. However, occasionally integrating the list would be preferable to leaving it open, which could indeed generate much uncertainty.

Once the EU Commission issues these guidelines, its position with respect to job cartels will be crystal clear, which would have at least three corollaries.

Firstly, national competition authorities of EU Member States would be able to act in an environment of legal certainty when enforcing the national legal provisions corresponding to art. 101 TFEU against job cartels. Secondly, said guidelines would constitute a basis for the EU Commission’s evaluation of “non-solicitation clauses” in the context of a concentration, under Section A, para 26 of the Commission Notice on restrictions directly related and necessary to concentrations.[74] On the one hand, undertakings willing to realise a concentration, reading said guidelines, could have an idea of how no-poach agreements will be evaluated by the EU Commission; on the other hand, the latter could use the powers it has in relation to concentrations to alleviate, mitigate and prevent the risks of job cartels. Thirdly, stating that no-poach and wage-fixing agreements are cartels would entail recognising that undertakings who enter into such agreements can admit their wrongdoing and apply for a shield or a reduction of the fine under the leniency program.[75]

The third point is of the utmost importance. In fact, when assessing possible outcomes, one has to deal with practical issues as well: the Commission faces a shortage of personnel.[76] Applicants under the leniency program have consistently been a resource for the Commission, allowing said authority not only to discover the existence of cartels, but also to have information to use as a starting point for its investigation.[77]

Furthermore, once the EU Commission will have clarified its position with respect to job cartels, it could launch campaigns to raise awareness on the issue. These events ought to be addressed to human resources personnel, so to better illustrate them where the border between what is legal and what is not lies. The necessity of holding informative sessions on job cartels has indeed been pointed out even in the USA, after the issue of the 2016 Guidance.[78] So, once again, the EU Commission could build upon the USA experience.

Finally, it should be taken into account that, despite the secrecy that characterises these agreements, it is not to be excluded that the employees concerned may notice something “suspicious” in the marketplace. It would be in employees’ best interests to communicate with the EU Commission, since they may want to bring a lawsuit against their employers to recover damages, after said employers have been fined for having cartelised a section of the labour market. It is thus advisable that the EU Commission organises informative sessions with employees as well, to illustrate to them both the issue of job cartels and the means available to them to refer to the authority, should they strongly suspect that these agreements have been entered into by their employer. Indeed, it is reasonable to assume that, should employees be aware of the seriousness of job cartels and of possibilities such as the so-called “Whistle-blower Communication Tools”,[79] they would not need to be incentivized to provide the EU Commission with some data that the authority could then use as a basis for its investigations.[80]

In brief, the EU Commission has all the incentives, resources and tools necessary to contribute to the fight against job cartels.

Considering the seriousness of the situation with job cartels, and the recent declaration of Margrethe Vestager on the issue,[81] it is highly likely that the EU Commission will take action with respect to these agreements. However, it is not possible to predict what will be done or when.

What is certain is that undertakings should not wait to find out the EU Commission’s intention in order to modify their human resources policies. In fact, when the authority imposes the first fines on parties of job cartels, it will already be too late to save the reputation of the undertakings concerned. Undertakings operating in EU Member States ought to learn from the American experience on this point. After the Silicon Valley episodes,[82] American antitrust law practitioners imagined that, with the shift from the Obama to the Trump Administration, no-poach and wage-fixing agreements would exit the radar of the DOJ.[83] History shows that they were mistaken, as the DOJ’s interest in this phenomenon did nothing but increase. Furthermore, no-poach and wage-fixing agreements appeared among the enforcement priorities of the Trump administration.[84] Needless to say, those (incorrect) predictions resulted in multiple undertakings being sanctioned without expecting it.[85]

It is thus necessary to explore the conducts that businesses in the EU could adopt in order to ensure that their conduct complies with competition law.

 Businesses operating across the EU could start by providing their human resources personnel with informative sessions concerning no-poach and wage-fixing agreements. This step could avoid situations in which certain undertakings are found to be part of a job cartel “just” because of a “naïve” conversation among their respective human resources personnel.

Additionally, undertakings in the EU could resort to NCAs with their employees, instead of entering into no-poach and wage-fixing agreements with their competitors. In fact, as previously stated, non-compete clauses, provided that they meet the requirements set by national laws of EU Member States, are considerably better tolerated than job cartels.[86] However, this proposal ought to be examined with caution. It should be taken into account that, in January 2020, the FTC disclosed its intention to rule on NCAs, stating that these clauses usually have a detrimental impact on competition as well.[87] In particular, antitrust authorities have recently focused on the increased use of NCAs in employment contracts with low-wage workers, where efficiency-based reasons, that usually push employers to enter into NCAs with employees, are deemed to be less plausible.[88] It cannot thus be excluded that the EU Commission will follow this path in the future, restricting the use of non-compete clauses.

It follows that undertakings ought to benefit from the time they have before the EU Commission’s intervention with respect to no-poach and wage-fixing agreements, in order to implement these internal policies.

To conclude, given the current worldwide situation with job cartels, there is no justification for the EU Commission’s silence on the point.

It has been shown that that no-poach and wage-fixing agreements plainly belong to the category of   cartels. Since the last mentioned are widely known to be “cancers on the open market economy”,[89]  this circumstance should raise concerns. Additionally, it is rather unlikely to find a justification for these practices in the labour market. The seriousness of the situation is also demonstrated by the resources that national competition authorities (also in the EU) have spent on the fight against job cartels.

It is thus strongly advisable that the EU Commission took a position with respect to these practices, in particular publishing guidelines, launching awareness campaigns, and fining undertakings that enter into no-poach and/or wage-fixing agreements. In order to carry out the last-mentioned activity, the EU Commission could start its investigation from data gathered via leniency application, as with other cartels. Moreover, given the nature of job cartels, said authority could receive information on no-poach and wage-fixing agreements from employees, who, being concerned, do not need any incentive to disclose information concerning their employers’ wrongdoings.

From another perspective, businesses ought to start informing their human resource departments and implementing internal human resources policy in order to ensure their compliance with art. 101(1) TFEU. A failure to take this step entails risking being the first to be fined by the EU Commission.

BIBLIOGRAPHY

Cases from the EU

Case C-8/08 T-Mobile Netherlands BV, KPN Mobile NV, Orange Nederland NV and Vodafone Libertel NV v Raad van bestuur van de Nederlandse Mededingingsautoriteit [2019] ECR I-04529.

Case T-17/93 Matra Hachette SA v Commission of the European Communities [1994] ECR II-598.

Pre-insulated Pipes Cartel (Case IV/35.691/E-4) Commission Decision 1999/60/EC [1998] OJ L24/1.

Case C-415/93 Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman, Royal club liégeois SA v Jean-Marc Bosman and others and Union des associations européennes de football (UEFA) v Jean-Marc Bosman [1995] ECR I-5040.

Cases from other jurisdictions inside the EU

USA v EBay (Complaint), United States District Court for the Northern District of California, San Jose Division (2012).

Case 200,056,331, Court of Appeal of Hertogenbosch, May 2010 (Netherlands).

Cour de Cassation, civile, Chambre sociale, 2 March 2011, 09-40.547 (France).

Decisions from national competition authorities in the EU

Peluquería Profesional, Case S/0086/08 (Comisión Nacional de los Mercados y la Competencia, Spain, 2012).

Private Schools Association, Case No. 11-12/226-76 (Turkish Competition Board, 2011).

EU Legislation

Consolidated Version of the Treaty on European Union [2012] OJ C 326/47.

European Parliament and Council Directive of 2014/104/EU of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union [2014] OJ L349/1.

Other legislation

California Business and Professions Code 1937.

Italian Civil Code 1942.

Books

Whish R. and Bailey D., ‘Competition Law’ (9th edn, OUP 2018).

Journals

Becker G, ‘Investment in Human Capital: A Theoretical Analysis’ (1962) 70/5 Journal of Political Economy 9.

Gürkaynak G., Donmez A.G., Özkanlı C., ‘Competition Law Issues in the Human Resources Field’ (2013) 4/3 Journal of European Competition Law & Practice 201.

Kobayashi B. H. and Ribstein L. E., ‘Privacy and Firms’ (2001-02) 79 Denver University Law Review 526.

Moudgil R.  and Bandey S., ‘Competition Law and Employment’ (2020) 1 Competition Commission of India Journal on Competition Law and Policy 141.

Miles J. J.D., ‘The Nursing Shortage, Wage-Information Sharing Among Competing Hospitals, and The Antitrust Laws: The Nurse Wages Antitrust Litigation’ (2007) 7 Houston Journal of Health Law & Policy 305.

Sullivan C.A., ‘Poaching’ (2021) 71 American University Law Review 649.

Online journals

Kass C., Munkittrick D.A. and Samuels R.N., ‘It’s Not a Threat, It’s a Promise: Timeline of the DOJ’s Statements and Actions Against Wage Fixing and No Poach Agreements’ (2022) 12/115 The National Law Review <https://www.natlawreview.com/article/it-s-not-threat-it-s-promise-timeline-doj-s-statements-and-actions-against-wage> accessed 12 May 2022.

Kobayashi B.H., ‘Antitrust, Non-Competition, and No-Poach Agreements in Digital Industries’ (2020) 20 The Global Antitrust Institute Report on the Digital Economy 707 <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3733724> accessed 12 May 2022.

Lobel O., ‘Gentlemen Prefer Bonds: How Employers Fix the Talent Market’ (2020) 59/3 Santa Clara Law Review 663 <https://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=2886&context=lawreview> accessed 12 May 2022.

Pittman R.W., ‘A Note on Antitrust, Labor, and “No Cold Call” Agreements in Silicon Valley’ (2020) Competition Policy International <https://www.competitionpolicyinternational.com/texas-to-lead-new-antitrust-suit-against-google-over-ad-tech/> accessed on 12 May 2022.

Starr E., ‘The Use, Abuse and Enforceability of Non-Compete and No-Poach Agreements: A Brief Review of the Theory, Evidence, and Recent Reform Efforts’ (2019) Economic Innovation Group 1 <https://eig.org/wp-content/uploads/2019/02/Non-Competes-Brief.pdf> accessed 12 May 2022.

Stutz R.M., ‘The Evolving Antitrust Treatment of Labor-Market Restraints: From Theory to Practice’ (2018) American Antitrust Institute <https://ssrn.com/abstract=3332642> accessed 12 May 2022.

Taladay and  Vishal Mehta, ‘Criminalization of wage-fixing and no-poaching agreements’ (2017) Competition Policy International 1 <https://www.competitionpolicyinternational.com/criminalization-of-wage-fixing-and-no-poaching-agreements-2/> accessed on 12 May 2022.

Websites and blogs

Autorità Garante della Concorrenza e del Mercato, ‘Press Release: Intesa anticoncorrenza, multa Antitrust da 4.5 milioni a 8 agenzie di modelle e a associazione categoria Assem’ (AGCM, 2016) <https://www.agcm.it/media/comunicati-stampa/2016/11/alias-8448> accessed May 12 2022.

Demir K. and Baysa U., ‘HR is on the Radar of the Turkish Competition Authority’ (Baysal -Demir) <https://www.baysaldemir.com/files/HR-competation-Baysal-Demir.pdf> accessed 12 May 2022.

Grimes D.R. and Karnell A., ‘DOJ: No-poach Agreements Violate Antitrust Laws, Criminal Penalties Against Companies Are on the Way’ (2018) (Lexology, 2018) <https://www.lexology.com/library/detail.aspx?g=7dd38221-88e3-4cfa-88c4-29f474fa4902> accessed 12 May 2022.

‘Non-Competes in the Workplace: Examining Antitrust and Consumer Protection Issues’ (FTC, 9 January 2020) <https://www.ftc.gov/news-events/events/2020/01/non-competes-workplace-examining-antitrust-consumer-protection-issues> accessed 12 May 2022.

The Silicon Valley Anti-Poaching Conspiracy (Antitrust.buzz) <https://web.archive.org/web/20150122225943/http://antitrust.buzz/anti-poaching/> accessed 12 May 2022.

Tween D., No poach Agreements: What’s the Big Deal?’ (Linklaters, 2018) <https://www.linklaters.com/en/insights/publications/2018/september/no-poach-agreements-whats-the-big-deal> accessed 12 May 2022.

‘Whistle-blower Communication Tools’ (EU Commission) <https://ec.europa.eu/competition-policy/cartels/whistle-blower_en> accessed on 12 May 2022.

Conferences, lectures and webinars

‘Competition for Talent: Limits on Hiring or Wages Risk Criminal Indictments and Jail’ (Webinar, Lexology in association with Morrison Forester, 21 March 2022).

Lemus C., ‘Week 9: Public Enforcement (Settlements)’ SOLM057-Cartels, Collusion and Competition Law, LL.M. program at Queen Mary University of London (2021/2022).

Löwhagen F., ‘Week 8: Private Enforcement’ SOLM057-Cartels, Collusion and Competition Law, LL.M. program at Queen Mary University of London (2021/2022).

Merlino P., ‘Main Developments in European and Italian Competition Law’ (Italian Antitrust Association Conference, Rome, May 2019).

Monti M., ‘Fighting Cartels Why and How? Why should we be concerned with cartels and collusive behaviour?’ (III Nordic Competition Policy Conference, Stockholm, September 2000).

Papanov T., ‘Week 11: Case Studies’ SOLM057-Cartels, Collusion and Competition Law, LL.M. program at Queen Mary University of London (2021/2022).

Vestager M., ‘A new era of cartel enforcement’ (Italian Antitrust Association Conference, Rome, October 2021).

Miscellaneous sources

Autoridade da Concorrência, ‘Labour Market Agreements and Competition Policy’ (2021).

Case C-415/93 Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman, Royal club liégeois SA v Jean-Marc Bosman and others and Union des associations européennes de football (UEFA) v Jean-Marc Bosman [1995] ECR I-5040, Opinion of AG Lenz.

Commission Notice on Immunity from fines and reduction of fines in cartel cases (2006) OJ C298/17.

Commission Notice on restrictions directly related and necessary to concentrations (2005) OJ C56/24.

Communication from the Commission, Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements [2011] OJ C11-1.

Hong Kong Competition Commission, ‘Competition Commission Advisory Bulletin’ (2018).

Nordic Competition Authorities, ‘Competitive Airlines Towards a More Vigorous Competition Policy in relation to the Air Travel Market’ (2002) Rep. No 1/2002.

OECD, ‘Competition in Labour Markets’ (2020).

OECD, ‘Competition Issues in Labour Markets – Note by BIAC’ AF/COMP/WD(2019)50.

OECD, ‘Competition Issues in Labour Markets – Note by Portugal’ DAF/COMP/WD(2019)47.

OECD, ‘Competition Issues in Labour Markets – Note by Spain’ DAF/COMP/WD(2019)48.

Statement of Federal Trade Commission concerning the Commission’s Consent Order, In the Matter of Your Therapy Source, Neeraj Jindal and Sheri Yarbray (2019) File No.  171-0134.

[1] Throughout this paper, the word “agreement” is used as an elliptical expression to refer to “agreements between undertakings, decisions by associations of undertakings and concerted practices”, pursuant to art. 101(1) of the Treaty on the Functioning of the European Union (hereinafter “TFEU”). Consolidated Version of the Treaty on European Union [2012] OJ C 326/47. See Richard Whish and David Bailey, ‘Competition Law’ (9th edn, OUP 2018) 101-119.

[2] This resulted in a class-action complaint being lodged on behalf of the over 64,000 employees concerned, seeking damages liquidation from the above-mentioned firms, and in bad reputation for those firms.   See ‘The Silicon Valley Anti-Poaching Conspiracy’ (Antitrust.buzz) <https://web.archive.org/web/20150122225943/http://antitrust.buzz/anti-poaching/> accessed 12 May 2022. For the purpose of this paper, Section 1 of the Sherman Act can be considered the American equivalent of art. 101 TFEU.

[3] Department Of Justice Antitrust Division and Federal Trade Commission, ‘Antitrust Guidance for Human Resources Professionals’ (2016).

[4] Ibid, 1-4.

[5] Indeed, some competition authorities, such as the Hong Kong one, have imitated the DOJ and FTC, issuing their own guidelines. See Hong Kong Competition Commission, ‘Competition Commission Advisory Bulletin’ (2018). Moreover, in 2019, the OECD held a roundtable on competition concerns in labour markets, resulting in the publication of an extremely comprehensive background note on the issue, which was also addressed at the OECD Competition Open Day held on 26 February 2020. What is impressive is that multiple national competition authorities took part in the discussions and contributed to the drafting of the above-mentioned background note. Among the participating countries were: Brazil, Croatia, Finland, Japan, Portugal, Spain, Singapore and Turkey. See OECD, ‘Competition in Labour Markets’ (2020).

[6] In fact, in 1995, Advocate General Lenz, in his Opinion in Bosman, upheld the Commission’s position, considering that the rules set by and for a group of sporting associations, which limited professional footballers’ mobility from one association to another were detrimental to competition law, as they allowed competitors to “share sources of supply”. See Case C-415/93 Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman, Royal club liégeois SA v Jean-Marc Bosman and others and Union des associations européennes de football (UEFA) v Jean-Marc Bosman [1995] ECR I-5040, Opinion of AG Lenz, paras 262 – 263. In a 2007 written reply to parliamentary questions the Commission reiterated this position. See Pietro Merlino, ‘Main Developments in European and Italian Competition Law’ (Italian Antitrust Association Conference, Rome, May 2019).

[7] Margrethe Vestager, ‘A new era of cartel enforcement’ (Italian Antitrust Association Conference, Rome, October 2021).

[8]TFEU (n 1) art. 101(1).

[9] It is worth bearing in mind that in the USA cartels can be criminally prosecuted, which is not possible within the EU legal framework. Therefore, for the purpose of this paper, the position of the USA antitrust authorities will be taken into account mainly to understand the dynamics behind no-poach and wage-fixing agreements and to explain their detrimental impact on competition. Then, proposals for the EU Commission will be given keeping in mind the tools that this authority has at its disposal for enforcing competition law.

[10] Included in the category of no-poach agreements are no-switch and no-hire agreements. The former are agreements that make the switching of an employee from one employer to another subject to the payment, by the same employee, of a sum of money. The latter are agreements not to hire each other’s employees, regardless of the means of recruitment.

[11] Douglas Tween, ‘No poach Agreements: What’s the Big Deal?’ (Linklaters, 2018) <https://www.linklaters.com/en/insights/publications/2018/september/no-poach-agreements-whats-the-big-deal> accessed 12 May 2022.

[12] The non-compete obligation includes the employee’s duty of abstention both from working for a rival of his/her previous employer and from starting a business in competition with his/her previous employer.

[13] ‘Top Ten Considerations for Non-compete Clauses in Europe (The Netherlands, Belgium, Spain, Germany, France, Italy)’ (L&E Global) <http://leglobal.org/wordpress/wp-content/uploads/2013/06/LEGlobal-Top-Ten-Considerations-for-Non-compete-Clauses-in-Europe.pdf> accessed 12 May 2022.

[14] For example, in Italy, non-compete clauses are null and void unless the employee is given fair compensation for his “duty of loyalty” after the contract termination, and the referenced duty’s duration does not exceed three or five years, depending on the job. Italian Civil Code 1942, art. 2125.

[15] California Business and Professions Code 1937, s 16600.

[16] Evan Starr, ‘The Use, Abuse and Enforceability of Non-Compete and No-Poach Agreements: A Brief Review of the Theory, Evidence, and Recent Reform Efforts’ (2019) Economic Innovation Group 1 <https://eig.org/wp-content/uploads/2019/02/Non-Competes-Brief.pdf> accessed 12 May 2022, 2.

[17] Rajat Moudgil and Suhaib Bandey, ‘Competition Law and Employment’ (2020) 1 Competition Commission of India Journal on Competition Law and Policy 141, 154-156.

[18] Bruce H. Kobayashi, ‘Antitrust, Non-Competition, and No-Poach Agreements in Digital Industries’ (2020) 20 The Global  Antitrust Institute Report on the Digital Economy 707 <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3733724> accessed 12 May 2022, 710.

[19] Starr (n 16) 4.

[20] TFEU (n 1) art. 101(1); European Parliament and Council Directive of 2014/104/EU of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union [2014] OJ L349/1 (hereinafter “EU Damages Directive”), art. 2(14).

[21] Given that no-poach and wage-fixing agreements, despite being different in nature, sort the same effects (see Section 2), for the purpose of this section, what is said with respect to one of them refers to both of them.

[22] USA v EBay (Complaint), United States District Court for the Northern District of California, San Jose Division (16 November 2012), para 11.

[23] Koray Demir and Ulaş Baysa, ‘HR is on the Radar of the Turkish Competition Authority’ (Baysal -Demir)  <https://www.baysaldemir.com/files/HR-competation-Baysal-Demir.pdf> accessed 12 May 2022, 2-4.

[24] Dale R. Grimes and Ashleigh Karnell, ‘DOJ: No-poach Agreements Violate Antitrust Laws, Criminal Penalties Against Companies Are on the Way’ (2018) (Lexology, 2018) <https://www.lexology.com/library/detail.aspx?g=7dd38221-88e3-4cfa-88c4-29f474fa4902> accessed 12 May 2022.

[25] TFEU (n 1) art. 101(1).

[26] TFEU (n 1) art. 101(1)(a).

[27] In fact, “employers are competing buyers in the labour market and employees are the sellers”. OECD, ‘Competition Issues in Labour Markets – Note by Portugal’ DAF/COMP/WD(2019)47, 5.

[28] Starr (n 16) 3.

[29] TFEU (n 1) art. 101(1)(b). OECD, ‘Competition Issues in Labour Markets – Note by Portugal’ (n 27), 8.

[30] Autoridade da Concorrência, ‘Labor Market Agreements and Competition Policy’ (2021) 11.

[31] Ibid, 14-17.

[32] Statement of Federal Trade Commission concerning the Commission’s Consent Order, In the Matter of Your Therapy Source, Neeraj Jindal and Sheri Yarbray (2019) File No.  171-0134, 2-4.

[33] Autoridade da Concorrência (n 30) 18. Customer allocation is one of the ways to “share markets”, referred to in TFEU (n 1) art. 101(1)(c).

[34] Communication from the Commission, Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements [2011] OJ C11-1, paras 55-94. The illegality of the exchange of commercially sensitive information can be also inferred by the wording of art. 101(1) TFEU itself. For instance, an exchange of information between undertakings concerning the prices for their products or services would amount to “indirectly fix purchase prices”, within the meaning of TFEU (n 1) art. 101(1)(a).

[35] Whish and Bailey (n 1) 557-559.

[36] Moudgil and Bandey (n 17) 149; Gönenç Gürkaynak, Ayşe Güner and Ceren Özkanlı, ‘Competition Law Issues in the Human Resources Field’ (2013) 4/3 Journal of European Competition Law & Practice 201, 213. For example, with respect to the airline industry, it was clearly stated that operating costs include pilots’ wages, au pair of “fuel costs, aircraft’s maintenance and capital costs”. Nordic Competition Authorities, ‘Competitive Airlines Towards a More Vigorous Competition Policy in relation to the Air Travel Market’ (2002) Rep. No 1/2002, 53.

[37] Jeff Miles J.D., ‘The Nursing Shortage, Wage-Information Sharing Among Competing Hospitals, and The Antitrust Laws: The Nurse Wages Antitrust Litigation’ (2007) 7 Houston Journal of Health Law & Policy 305, 330.

[38] Gürkaynak et al. (n 36) 206-214.

[39] The majority of competition authorities tend to interpret this exemption restrictively. Gürkaynak et al. (n 36) 214. It is reasonable to assume that national competition authorities’ severity on the point is due to the frequent information exchange concerning human resources data that undertakings have been exchanging among themselves throughout the years, to cartelise the relevant market. To that end, an appropriate example is the Peluquería Profesional Case, where, in 2011, the Spanish Competition Authority found out that some producers of perfumes and other beauty products had been exchanging present and future commercial information of various types, among which information relating to the pay for salespeople (fixed and variable), commissions and daily expense allowances for each employee. See Peluquería Profesional, Case S/0086/08 (Comisión Nacional de los Mercados y la Competencia, Spain, 2012); OECD, ‘Competition Issues in Labour Markets – Note by Spain’ DAF/COMP/WD(2019)48, 2-5.

[40] For example, they ought to be punished even if they are non-binding and/or non-enforceable between the parties or if they have not been implemented.

[41] For example, the Turkish Competition Board has stated that, since agreements entered into by and between private schools to maintain teachers’ salaries low are cartels, they can be punished even if they are non-binding or non-enforceable between the parties. Private Schools Association, Case No. 11-12/226-76 (Turkish Competition Board, 2011), paras 470, 610-630.

[42] For instance, the French Cour de Cassation stated that the illegality of a no-poach agreement entered into among competitors lied in the restriction of employees’ freedom of occupation. No reference was made to competition in the market. Cour de Cassation, civile, Chambre sociale, 2 March 2011, 09-40.547 (France).

[43] Case T-17/93 Matra Hachette SA v Commission of the European Communities [1994] ECR II-598, para 70. Whish and Bailey (n 1) 159-160.

[44] Given that all requirements listed in art. 101(3) TFEU have to be met for art. 101(1) TFEU not to apply, demonstrating that at least one of said requirements is not met would amount to demonstrating that art. 101(1) applies. TFEU (n 1) art. 101(3). For the sake of clarity, it remains understood that the applicability of art. 101(3) TFEU is to be assessed on a case-by-case basis. However, there are certain agreements which would practically never benefit of said provision. Therefore, the purpose of this section is to demonstrate that job cartels are among said agreements, illustrating all the obstacles to the acceptance of a justification for a no-poach or a wage-fixing agreement.

[45] He indeed clarified that only “collective agreements between employers’ associations and trade unions” fall outside the scope of competition law, not every practice put in place on the labour market. AG Lenz Opinion in Bosman (n 6), para 273.

[46] This is indeed what has been sustained in the USA, in order to advocate for allowing a broader use of NCAs. Kobayashi (n 18) 716-718

[47] Bruce H. Kobayashi and Larry E. Ribstein, ‘Privacy and Firms’ (2001-02) 79 Denver University Law Review 526, 530.

[48] TFEU (n 1) art. 101(3)(a).

[49] To that end, a leading case is the one that, in 2010, concerned the practices of 15 Dutch hospitals, which entered into both no-poach and wage-fixing agreements in relation to their anaesthesiologists. One of the statements made by said hospitals to justify their practice was that they were all facing a shortage of anaesthesiologists in the labour market. Needless to say, the Court firmly objected (also) to this justification. Case 200,056,331, Court of Appeal of Hertogenbosch, May 2010 (Netherlands), paras 4.3.1-4.3.3.

[50] Case C-8/08 T-Mobile Netherlands BV, KPN Mobile NV, Orange Nederland NV and Vodafone Libertel NV v Raad van bestuur van de Nederlandse Mededingingsautoriteit [2019] ECR I-04529, para 40.

[51] The distinction between “general” and “specific” training was outlined for the first time by Gary Becker and refined later on. According to Becker, general training is aimed at providing workers with skills that they could re-use in any other working environment within the same industry, whereas “specific” training attains to those abilities that are intrinsically linked to one specific firm (e.g. internal code of conduct or policies). Gary Becker, ‘Investment in Human Capital: A Theoretical Analysis’ (1962) 70/5 Journal of Political Economy 9, 12-18.

[52] Russell W. Pittman, ‘A Note on Antitrust, Labor, and “No Cold Call” Agreements in Silicon Valley’ (2020) Competition Policy International <https://www.competitionpolicyinternational.com/texas-to-lead-new-antitrust-suit-against-google-over-ad-tech/> accessed 12 May 2022.

[53] Nevertheless, a consistent trend has been noted among American fast-food franchises to enter into no-poach and wage fixing agreements with respect to low qualified employees. Pittman (n 52) 3.

[54] OECD, ‘Competition Issues in Labour Markets – Note by BIAC’ AF/COMP/WD(2019)50, 4-5; John M. Taladay and  Vishal Mehta, ‘Criminalization of wage-fixing and no-poaching agreements’ (2017) Competition Policy International 1 <https://www.competitionpolicyinternational.com/criminalization-of-wage-fixing-and-no-poaching-agreements-2/> accessed 12 May 2022.  Should this be true, it would amount, within the EU competition law framework, to the meeting of at least one of the requirements for the applicability of art. 101(3) TFEU, i.e. the one mentioned in letter a).

[55] OECD, ‘Competition Issues in Labour Markets – Note by Portugal’ (n 27), 7. The reluctance of parties of job cartels towards passing on their “gains” to consumers can also be inferred by the meticulous attention with which they hide the contacts they have. In other words, if parties of job cartels had the intention to sell their products or provide their services at a lower price to final consumers, they would not be so devious when agreeing on what to do. To that end, a relevant example is how eight Italian firms have managed, through the relevant association, to exchange information concerning models’ salaries and conditions of employment, aligning their human resources policies, for eight years, from 2007 to 2015. See Autorità Garante della Concorrenza e del Mercato, ‘Press Release: Intesa anticoncorrenza, multa Antitrust da 4.5 milioni a 8 agenzie di modelle e a associazione categoria Assem’ (AGCM, 2016) <https://www.agcm.it/media/comunicati-stampa/2016/11/alias-8448> accessed May 12 2022.

[56]Case C-8/08 T-Mobile Netherlands (n 50) para 38.

[57] TFEU (n 1) art. 101 (3)(b).

[58] See Section 3.

[59] 2016 Guidance (n 3) 3.

[60] Ibid 3-5.

[61] ‘Competition for Talent: Limits on Hiring or Wages Risk Criminal Indictments and Jail’ (Webinar, Lexology in association with Morrison Forester, 21 March 2022).

[62] Ibid.

[63] OECD, ‘Competition in labour markets’ (n 5) 32.

[64] As previously mentioned (Section 3), said harmonisation is needed in dealing with job cartels. Otherwise, the same agreement will continue to be treated differently in different Member States, which are all applying the same law, i.e. EU competition law and its national equivalents.

[65] To that end, util now, the Portuguese Competition Authority has been the only one to assess that job cartels are so detrimental to competition that they generate the same effects as numerous of cartels mentioned in art. 101 TFEU. See Autoridade da Concorrência (n 30). 

[66] Section 3.

[67] 2016 Guidance (n 3).

[68] Ibid, 4-11.

[69] Section 3.

[70] 2016 Guidance (n 3) 4.

[71] When it comes to the different degree of deterrence of the consequences of job cartels in the EU versus in the USA, an important point to mention is that class actions, inter alia by employees, are definitely more common in the latter territory than in the former. It is thus easier for victim of cartels to be able to recover damages in the USA than in the EU. Fredrik Löwhagen, ‘Week 8: Private Enforcement’ SOLM057-Cartels, Collusion and Competition Law, LL.M. program at Queen Mary University of London (2021/2022). It follows that, if being sanctioned for having entered into a job cartel is a bigger threat in the USA than in the EU, this could be due to the difference between the amount of damages that the undertakings concerned will likely have to pay, to the employees concerned, in one territory versus in the other.

[72] Section 4.

[73] Ibid.

[74] Commission Notice on restrictions directly related and necessary to concentrations (2005) OJ C56/24, s A, para 26. Indeed, in para 26 of said Notice, the EU Commission stated that “non-solicitation clauses”, which can be assimilated to no-poach agreements, will be evaluated in the context of a concentration. However, there is no explanation as to how and on which grounds the evaluation in question will be carried out.

[75] The leniency program is beyond the scope of this paper. To learn more about it, see Commission Notice on Immunity from fines and reduction of fines in cartel cases (2006) OJ C298/17.

[76] Approximately 90 people work for the EU Commission. Claudia Lemus, ‘Week 9: Public Enforcement (Settlements)’ SOLM057-Cartels, Collusion and Competition Law, LL.M. program at Queen Mary University of London (2021/2022).

[77] Todor Papanov, ‘Week 11: Case Studies’ SOLM057-Cartels, Collusion and Competition Law, LL.M. program at Queen Mary University of London (2021/2022).

[78] ‘Competition for Talent: Limits on Hiring or Wages Risk Criminal Indictments and Jail’ (n 61).

[79] ‘Whistle-blower Communication Tools’ (EU Commission) <https://ec.europa.eu/competition-policy/cartels/whistle-blower_en> accessed 12 May 2022.

[80] Employees would indeed have nothing to lose, but everything to gain, sending an anonymous message to the EU Commission. In the worst-case scenario, said authority will close the investigation. However, should the EU Commission fine the employers concerned, employees will not have to prove the existence of the job cartel and their employers’ participation in it.

[81] Section 1

[82] Ibid.

[83] ‘Competition for Talent: Limits on Hiring or Wages Risk Criminal Indictments and Jail’ (n 61).

[84] Ibid.

[85] Colin Kass, David A. Munkittrick and Reut N. Samuels, ‘It’s Not a Threat, It’s a Promise: Timeline of the DOJ’s Statements and Actions Against Wage Fixing and No Poach Agreements’ (2022) 12/115 The National Law Review <https://www.natlawreview.com/article/it-s-not-threat-it-s-promise-timeline-doj-s-statements-and-actions-against-wage> accessed 12 May 2022.

[86] Section 2.

[87] ‘Non-Competes in the Workplace: Examining Antitrust and Consumer Protection Issues’ (FTC, 9 January 2020) <https://www.ftc.gov/news-events/events/2020/01/non-competes-workplace-examining-antitrust-consumer-protection-issues> accessed 12 May 2022.

[88] Kobayashi (n 18) 708. Pittman (n 52) 3.

[89] Mario Monti, ‘Fighting Cartels Why and How? Why should we be concerned with cartels and collusive behaviour?’ (III Nordic Competition Policy Conference, Stockholm, September 2000).