Author: Molly Donovan
A new episode of the “If I Were You” podcast is ready! You can listen to it here. Featuring guest host Luis Blanquez and guest commentators Andreas Reindl and Marc Freedman of Van Bael & Bellis, a leading independent firm based in Brussels and London with an outstanding competition law practice. If you’re not a podcaster, read Andreas’ and Marc’s thoughts about antitrust enforcement in US and EU labor markets here:
This Episode Is About: Antitrust enforcement in UK an EU labor markets
Why: The UK’s competition authority (Competition and Markets Authority) recently issued antitrust guidance to UK employers so it’s a good time for an update and check-in on this subject
The Five Bullets: In-house lawyers, if I were you, I would educate your employment team about the following antitrust risks in UK and EU labor markets.
- The CMA’s guidance encourages businesses, their lawyers and recruiters to avoid:
- No-poaching agreements: 2 or more businesses agree not to approach or hire each other’s employees (or not to do so without the other employer’s consent).
- Wage-fixing agreements: 2 or more businesses agree to fix employees’ pay or other employee benefits. This includes agreeing to the same wage rates or setting maximum caps on pay.
- Information sharing: 2 or more businesses share sensitive information about terms and conditions that a business offers to employees.
- The guidance does not mention that businesses can violate UK antitrust law by reaching labor-related agreements even if they do not compete in the downstream market. The product market of concern is labor (not the goods or services produced by labor).
- Enforcement in the UK is real: the CMA has been aggressive in prosecuting and levying very significant fines on companies that infringe UK antitrust law. The CMA has other sanctions at its disposal, including – unlike many other European antitrust authorities – possible criminal liability and individual director disqualifications. CMA’s guidance signals a change in enforcement priorities with a marked increase in antitrust scrutiny of labor markets.
- EU companies may be behind the curve in terms of compliance based on a perception that labor markets are not an area of competition concern. This needs to change: there’s been a recent uptick in enforcement activity in labor markets by a number of Member State competition authorities and there are clear signals that the European Commission is actively looking at labor markets as well.
- If you’re a UK or EU employer and realize you’ve already crossed the line, you need a lawyer’s assessment to decide the most appropriate strategy that mitigates the risks. Strategies range from stepping away from the agreement and documenting that decision to making a leniency application. Whether or not to communicate a withdrawal to the other agreeing parties is a difficult one that should be thought through on a case-by-case basis. To avoid this difficult situation, make compliance a top priority and incorporate labor-related conduct into antitrust compliance policies, trainings and protocols for internal reporting.
Bonus Bullet: At least in EU member states, enforcement against labor-market agreements would be administrative, and in most cases the authorities could rely on a legal presumption that these agreements are an antitrust violation (and justifications most likely won’t matter). The result: it would be considerably easier for the member-state authorities to adopt an infringement decision and defend it in court, than it would be for US prosecutors to obtain a criminal conviction in a US court.