A recent lawsuit accuses Duke University and UNC-Chapel Hill of agreeing not to hire each other’s medical faculty—a so-called “anti-poaching” agreement—in order to suppress the labor market for medical school professors/personnel and keep wages low. The plaintiff, a Duke radiologist, alleges that the agreement between the two universities prevented her from obtaining an open job at UNC-CH. According to a recent news article, expert witnesses for plaintiff believe that the alleged agreement caused under-compensation of faculty members in the amount of $447 million over a period of five years.
In competitive markets—such a medical faculty, computer software programmers, financial executives, and other in high demand—allegations of such agreements are not uncommon. For example, Disney recently settled Nitsch v. DreamWorks Animation SKG Inc., 14-cv-04062 for a whopping $100 million. The plaintiffs in the Disney case alleged that Disney conspired with competitors by entering into anti-poaching agreements for animators. Disney was the last studio to settle those allegations—Blue Sky Studios, DreamWorks Animation, Two Pic MC, Pixar, Sony Pictures Animation, and Sony Pictures Imageworks all reached settlements by October 2016. Samsung and LG are currently facing a lawsuit that accuses the two of conspiring not to hire each other’s employees in the U.S. Apple, Google, and other tech companies settled a case involving software engineers in 2015 for $415 million. In another recent case, McDonald’s franchisees were accused of agreeing to not hire employees from each other.
Courts have agreed that anti-poaching agreements are a direct violation of Section 1 of the Sherman Antitrust Act of 1890, which prohibits agreements “in restraint of trade.” When competing companies enter into agreements with one another not to poach one another’s employees, they are violating the Act by restraining the labor market in a specific skill set, decreasing employees’ ability to increase their income and/or move to another job.
If you are an employee working at a company where you think that your company may have a “gentleman’s agreement” with their competition not to hire you away, contact an employment attorney.
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