Agreements between employers restricting hiring or fixing compensation are treated as antitrust violations rather than as ordinary contract terms.
Per se offences. Naked agreements among competing employers not to solicit or hire each other’s employees, and agreements on wages or wage components, are market allocation and price fixing. Criminal prosecution has been brought, though juries have not uniformly convicted.
Competing employers means competing for labour, which includes businesses that do not compete in any product market.
Ancillary restraints. Restrictions reasonably necessary to a legitimate collaboration — a joint venture, an acquisition, a services agreement — are assessed under a rule of reason, and are lawful where reasonably limited in scope, duration and the employees covered.
Information exchange about compensation among competitors, including through surveys and benchmarking, requires structure: historical data, aggregated, from enough participants, administered by a neutral third party.
Franchise systems. No-hire provisions among franchisees of the same brand have been challenged, with courts divided on the applicable standard.
Practical compliance. Train recruiters and executives that informal understandings carry the same exposure as written agreements, and route any proposed hiring restriction through counsel.