Competition law and labour markets – looking beyond no-poach and wage-fixing agreements

In recent years, competition authorities around the world have begun to focus on labour markets. They now treat agreements between employers not to hire each other’s staff (no-poach), or to cap pay and benefits for certain roles (wage-fixing) as cartels.

Authorities also consider labour market effects in merger control proceedings – for example, the US Department of Justice’s challenge to Kroger’s acquisition of Albertsons. More recently, they have classified ‘acqui-hires’ – buying a business chiefly for its people, alongside finance or intellectual property arrangements – as concentrations, as seen in the UK Competition and Markets Authority and German Bundeskartellamt review of Microsoft/Inflection AI.

Though still new, this area already features numerous live investigations across jurisdictions (see our previous blog posts (access our full briefing paper which does two things:

• Identifies common patterns emerging from current cases that companies should consider when gauging risk.
• Highlights compliance issues beyond the usual focus on no-poach and wage-fixing, including:
  • Collective bargaining, with a spotlight on self-employed workers.
  • Non-solicitation clauses in M&A, confidentiality agreements, R&D cooperation agreements and distribution contracts.
  • The implications for M&A more broadly.

For any questions, please feel free to approach any of the authors or your usual Freshfields contact.