Legal News

Do Tech Industry?s Hiring Practices Violate Antitrust Law?

By Ashby Jones

The antitrust cases you read about in law school involve price fixing by a collection of companies or aggressive moves by one company with dominant market power. They don’t, generally speaking, involve agreements between companies not to recruit employees away from each other.

But the Justice Department is looking into precisely this in regard to some of the nation’s biggest companies, including Google, Intel, IBM, Apple and IAC/InterActiveCorp. Click here for the WSJ story, from Tom Catan and Brent Kendall.

According to the story, the inquiry is focused on whether companies, particularly in the technology sector, have agreed not to recruit each others’ employees in ways that violate antitrust law. Specifically, the probe is looking into whether the companies’ hiring practices are costing skilled computer engineers and other workers opportunities to change jobs for higher pay or better benefits.

After a probe that began more than a year ago, Justice Department investigators have concluded that such agreements do raise significant competitive concerns. That said, the leadership of the antitrust division hasn’t yet decided whether-or how-to challenge the hiring practices, these people said. About a dozen companies are meeting with top antitrust officials at the Justice Department this week and next, some to defend their practices, others to provide information.

Antitrust experts say the Justice Department could argue that an agreement between competitors that holds down labor costs is as much a violation of antitrust laws as an agreement to fix prices.

Such agreements are “very close to the line,” said Melissa Maxman, an antitrust lawyer at the law firm Cozen O’Connor. “They’re not agreeing on price, but they’re kind of agreeing on costs.”

Full post as published by Law Blog - WSJ.com on April 12, 2010 (boomark / email).