When competitors make agreements with one another about what they will charge, the territories they will divide, the customers each will sell or the employees they will hire, red flags should raise because antitrust issues may be implicated. Last year I wrote about the settlement several Silicon Valley technology companies reached with the US Department of Justice's Antitrust Division over their agreements not to cold-call recruit each others employees.
Last week, Bloomberg reported on the follow-along civil claim being asserted by a group of tech company employees who claim that their wages were unlawfully depressed by the agreements that were the subject of the DOJ settlement. According to lawyers for the plaintiffs, the unlawful conspiracy to violate the antitrust laws had the effect of artificially depressing employee wages that could amount to hundreds of millions of dollars. Regardless of the merits of the civil conspiracy action, it has and will take millions of dollars for the employers to defend the DOJ Antitrust investigation and the resulting civil action. Competitors must be careful when they work with one another to ensure not only that their actions comply with the relevant employment laws, but also with state and federal antitrust laws.
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