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RED FLAGS FOR ANTITRUST EMPLOYMENT PRACTICES

The Antitrust Division of the Department of Justice (DOJ) has announced a new initiative to criminally investigate and prosecute employers who enter agreements with their competitors to limit or fix the terms of employment for potential hires.

The DOJ and the Federal Trade Commission (FTC) issued guidance for Human Resources (HR) professionals that provides a deeper explanation of the relevant laws, potential violations, and best practices for avoiding liability.  Here is a link to the guidance that was issued October 2016: https://www.justice.gov/atr/file/903511/download

The following Red Flags” for HR professionals have been identified by the FTC and DOJ as examples of “Antitrust”.  These nine red flags are indicative of what types of agreements or information exchanges may violate the regulations.  This is not an all-inclusive list nor does the presence of a red flag automatically indicate an antitrust violation.

  1. Agree with another company about employee salary or other terms of compensation, either at a specific level or within a range.
  2. Agree with another company to refuse to solicit or hire that other company’s employees.
  3. Agree with another company about employee benefits.
  4. Agree with another company on other terms of employment.
  5. Express to competitors that you should not compete too aggressively for employees.
  6. Exchange company-specific information about employee compensation or terms of employment with another company.
  7. Participate in a meeting, such as a trade association meeting, where the above topics are discussed.
  8. Discuss the above topics with colleagues at other companies, including during social events or in other non-professional settings.
  9. Receive documents that contain another company’s internal data about employee compensation.

In the Guidance, HR employees have been specifically identified as individuals in positions of authority with respect to hiring and compensation decisions and so will need to lead the charge to ensure that their company is not the target of an investigation.

The DOJ’s and FTC’s Guidance provides certain boundaries for common HR practices like benchmarking and participation in compensation surveys to determine whether companies are paying competitive compensation packages to their employees. HR professionals should follow this previously issued detailed guidance on how best to exchange compensation information for benchmarking purposes in an antitrust compliant way. See Statement 6, Provider Participation in Exchanges of Price and Cost Information, United States Dep’t of Justice and Federal Trade Commission, Statements of Antitrust Enforcement Policy in Health Care (Aug. 1996).

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.