DOJ and FTC Investigations of Employee “No-Poach Agreements”

AHA Legal Advisory
August 12, 2021

What Hospitals Need to Know

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At A Glance

The Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC) (together, the “Antitrust Agencies”) have dramatically increased their enforcement actions against “no-poach” agreements, where companies agree not to recruit or hire each other’s employees. DOJ is now bringing criminal prosecutions of no-poach agreements on a regular basis.

The Antitrust Agencies’ reinvigorated enforcement of “no-poach” agreements is consistent with President Biden’s recent Executive Order (EO) on Competition in the American Economy. That order singled out non-compete and “other clauses or agreements that may unfairly limit worker mobility” for increased scrutiny.

To help hospitals and health systems reduce their risks of prosecutions of no-poach agreements, the AHA enlisted the law firm of Wilson Sonsini for an in-depth analysis of the DOJ’s and FTC’s policies and insights on how the hospital sector should respond. This Legal Advisory is the latest in a series of resources that we will provide on this issue to ensure that AHA members are informed about important legal developments.

AHA Take

Hospitals and health care systems should expect the federal antitrust agencies to be even more aggressive in investigating and prosecuting ‘no-poach’ agreements. A good first step to avoid running afoul of the agencies would be to review any relevant agreements against the “Practices and Protocols to Reduce Risk” outlined in this advisory.

What You Can Do

Share this advisory with your human resources department, legal counsel, and others engaged in recruiting and/or setting employee compensation and benefits.

  • Review the 2016 Antitrust Guidance for HR Professionals issued by the FTC and DOJ and consider its application to your organization and activities.
  • Adopt an antitrust compliance program for your organization to lessen risk.

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