Are No-Poach and Wage-Fixing Agreements between Employers Illegal?

No-poach and wage-fixing agreements between competing employers can be criminal violations of the Sherman Act, and DOJ may criminally investigate and, where appropriate, bring felony charges against the participants, including both individuals and companies. The DOJ Antitrust Division and the Federal Trade Commission explain this in their January 2025 Antitrust Guidelines for Business Activities Affecting Workers, which replaced their 2016 guidance for human resource professionals. The guidelines state that they have no force or effect of law. They explain how the agencies identify and assess business practices that affect workers.

No-poach agreements. Under the guidelines, companies that compete to hire or keep workers are competitors in the labor market even if they make different products or offer different services. An agreement between them not to hire or not to solicit each other's employees is a no-poach agreement. A "no cold call" agreement counts as a no-solicit agreement.

Wage-fixing agreements. Agreeing on pay or other terms of employment, including a pay range, a ceiling or a benchmark, is wage fixing. The agreement can be informal or unwritten. According to the guidelines, when formed between competing or potentially competing employers, directly or through an intermediary, these agreements are illegal even if they did not result in actual harm such as lower wages.

Franchises and information sharing. No-poach clauses between a franchisor and franchisees, or among franchisees, are also subject to antitrust scrutiny and may violate the antitrust laws. Exchanging competitively sensitive information about pay or benefits with competitors may be illegal, including when the exchange runs through a third party or intermediary using an algorithm.

Other restrictions. The guidelines add that non-compete agreements, training repayment agreement provisions and overly broad nondisclosure agreements may also violate the antitrust laws when they restrict worker mobility.

Reporting. Information about a possible violation can be reported to the Antitrust Division's complaint center or to the FTC. The Division lists 202-307-2040 and 888-647-3258.

Recent enforcement. Recent Antitrust Division enforcement is covered in the news posts on the egg producer price conspiracy case and the Agri Stats settlement.

Penalties for these violations are covered in the FAQ on Sherman Act criminal penalties.