Are ‘No Poach’ Agreements Putting Your Business at Risk?

Last year, the European Commission warned businesses about the risks of agreeing not to ‘poach’ each other’s employees, or to supress wages. Practices such as these have previously led to investigations and fines by national competition authorities. With labour market agreements now an enforcement priority for the European Commission, the CCPC may follow suit. Our Competition, Antitrust & Foreign Investment team explores the implications.

The European Commission has clearly communicated its intention to take a strict approach towards all forms of ‘no-poach’ and wage-fixing agreements. The Commission views ‘no poach’ agreements and wage-fixing as forms of market sharing and purchase price fixing, respectively, which are serious infringements of the competition laws.

Agreements not to hire and not to solicit – one and the same

The Commission has adopted an expansive view of the types of conduct that may qualify as a ‘no-poach’ agreement. The Commission considers that, insofar as the competition laws are concerned, there is no meaningful distinction between an agreement not to actively or passively hire employees and an agreement not to proactively solicit employees. Both are potential restrictions of ‘competition by object’. This means that agreements not to hire or solicit another company’s employees are considered to be inherently harmful to competition. As a result, it is not necessary for the European Commission to examine their effects to find an infringement of EU competition law.

Dawn raids

The European Commission has not yet issued an infringement decision concerning a no-poach or wage-fixing arrangement. Last year, the European Commission announced it had opened a formal investigation in the food delivery sector, prompted by concerns about possible no-poach agreements, among other matters. The announcement followed separate dawn raids carried out at the premises of Delivery Hero and Glovo in 2022 and 2023, respectively. Additionally, in November 2024, the European Commission announced that it had carried out dawn raids in the data centre construction industry. The purpose was to investigate “possible collusion in the form of no-poach agreements”.

In Ireland, the Chair of the Competition and Consumer Protection Commission (CCPC) has confirmed that the CCPC would be keen to investigate wage-fixing or no-poach agreements if evidence of these arrangements emerged.

Practical steps for businesses

Given the seriousness with which competition authorities throughout Europe are approaching agreements impacting labour markets, businesses should take practical steps to minimise risk including:

• Ensure that HR personnel avoid sharing any information about employee salaries, hiring strategies or terms of employment with competing employers
• Ensure HR personnel and other key individuals involved in recruitment or talent acquisition receive tailored competition law training
• Obtain specialist competition law advice before anyone in the company communicates with competitors about wages or hiring decisions or strategies
• Contact your legal advisor without delay if you think your business may have engaged in any of the practices described in this article

Please get in touch with a member of our Competition, Antitrust & Foreign Investment team for more information.

The content of this article is provided for information purposes only and does not constitute legal or other advice.