Blatant anti-poaching agreements such as the ones among several large Silicon Valley tech companies that resulted in antitrust charges and an employee class action are unusual.         

“I don't believe that these sorts of 'naked' agreements are common in other industries, though it appears they were pervasive in Silicon Valley,” says Miller Canfield Principal Jay Yelton.

However, employers often enter into restrictive covenants with potential, current and departing employees to serve a legitimate business purpose.  

“The key is whether any agreement will have a broad anti-competitive impact on the market, or whether there will be a short-lived, relatively insignificant impact on competition because of the nature of the agreement and the companies that are parties to that agreement,” says Cozen O'Connor Member Michael Schmidt. If the companies are smaller and have lower competitive sales, the government is less likely to pursue an antitrust case, he adds.   

“There should be no doubt, however, that the DOJ will continue to scrutinize restrictive covenants affecting employee movement,” Schmidt says.

Blatant anti-poaching agreements such as the ones among several large Silicon Valley tech companies that resulted in antitrust charges and an employee class action are unusual.         

“I don't believe that these sorts of 'naked' agreements are common in other industries, though it appears they were pervasive in Silicon Valley,” says Miller Canfield Principal Jay Yelton.

However, employers often enter into restrictive covenants with potential, current and departing employees to serve a legitimate business purpose.  

“The key is whether any agreement will have a broad anti-competitive impact on the market, or whether there will be a short-lived, relatively insignificant impact on competition because of the nature of the agreement and the companies that are parties to that agreement,” says Cozen O'Connor Member Michael Schmidt. If the companies are smaller and have lower competitive sales, the government is less likely to pursue an antitrust case, he adds.   

“There should be no doubt, however, that the DOJ will continue to scrutinize restrictive covenants affecting employee movement,” Schmidt says.