DOJ suffers another defeat in a no-poach antitrust prosecution

Late last week, the US Department of Justice’s Antitrust Division suffered another defeat in its ongoing attempt to challenge employment practices under antitrust laws. On April 28, 2023, US District Judge Victor A. Bolden of the US District Court for the District of Connecticut granted a mid-trial motion for judgment of acquittal in a prosecution brought against several aerospace and staffing company leaders, who allegedly violated criminal antitrust laws by agreeing not to hire each other’s employees. Judge Bolden’s ruling held that, as a matter of law, the alleged no-poach agreement between the various defendants was not a market allocation agreement in per se violation of antitrust laws.

On December 15, 2021, the United States charged six executives at staffing companies that provided skilled engineers to aerospace companies with a conspiracy in restraint of trade in violation of § 1 of the Sherman Act. The government alleged that the defendants competed against one another to recruit and hire skilled workers and agreed to suppress competition between and amongst themselves by allocating employees in the aerospace industry working on projects for Raytheon Technologies’ Pratt & Whitney division. The matter proceeded to jury trial last month. The government rested its case-in-chief on April 24, 2023, and the court granted the defendants’ motion for judgment of acquittal on April 28, before the defendants put on any evidence.

Judge Bolden ruled that the government failed to establish market allocation, which can be a per se violation of the Sherman Act under current authorities. The judge’s analysis turned largely on the nature of the alleged no-poach agreement. He found that even if the government had adequately defined the relevant market and established the existence of an agreement between the defendants, the evidence established that the defendants’ purported agreement was so flexible and riddled with exceptions that they could not, as a matter of law, have allocated the relevant labor market to any meaningful extent. The court thus determined that, because hiring remained robust despite the alleged agreement (and even in the face of evidence of the defendants’ statements acknowledging that agreement), the government did not provide evidence from which a reasonable juror could conclude that the defendants had meaningfully allocated the labor market. The defendants there could not be criminally responsible for violating the Sherman Act.

This most recent acquittal is the government’s fourth defeat in its attempt to prosecute no-poach agreements under the antitrust laws. The Antitrust Division’s leadership continues to insist that it is committed to bringing no-poach prosecutions, but it remains to be seen whether and how this string of losses impacts future charging decisions.

More broadly, Judge Bolden’s decision suggests that evidence and facts matter, even where the government alleges a per se violation of the antitrust laws. He made clear his view that he government’s failure to establish a freeze in hiring ultimately doomed the government’s case. His ruling may provide a helpful evidentiary blueprint that defendants in future cases – both no-poach cases, and perhaps in other contexts – can use to narrow per se allegations.

Learn more about the implications of this decision by contacting any of the authors.