While Google has succeeded in its action against Levandowski, non-soliciting and non-hire agreements are not a panacea. Employers who do not have non-invitation agreements with Indiana employees may find that these contractual provisions are not legally applicable. In December 2019, the Indiana Supreme Court at Heraeus Medical, LLC v. Zimmer reviewed a company`s non-solicitation agreement and found that it was unenforceable because it prohibited a former employee from recruiting all employees of the company and not those in which the company had a “legitimate and protective interest.” The Heraeus decision may differ from a series of upcoming facts for a number of reasons, but what is quite clear is that employers must review these agreements with Indiana employees and, if necessary, review them. We work with many clients to do just that, and we advise you to do a definitive search so that you can get advice on your company`s options. The same issue is now being addressed in a group action filed in February in federal court in New York involving some of the world`s largest luxury retailers, including Gucci, Louis Vuitton, Saks and Prada. In this action, it is alleged that the defendants entered into non-poaching agreements between themselves that prohibit employees from moving from one company to another. Employers should review their existing contracts to determine if they do not have poaching and assess whether they should be removed. In addition, staff professionals and others involved in recruitment and compensation decisions should review the DOJ/FTC “guidelines” to identify and avoid antitrust pitfalls. The deluge of activities in this area of restrictive contract law will remain a hot topic for the foreseeable future, as will the threat of criminal and civil prosecutions for companies implementing non-poaching agreements.
In April 2018, the DOJ filed a cartel and abuse of dominance action against two of the world`s largest railway equipment manufacturers, Knorr-Bremse AG and Westinghouse Air Brake Technologies Corporation, at the same time as it filed a civil agreement. The complaint alleged that these companies and a third company, Faiveley, had spent nearly a decade in violation of Section 1 of Sherman`s “No Poach Nude” Act. The Cartel Department called the transaction “a strong first-rate comparison, which contains several provisions to terminate each defendant`s non-defence agreements and prevent future breaches.” To that end, the transaction agreement included: (i) a comprehensive order prohibiting defendants from entering into or maintaining cessation agreements for seven years between themselves and other employers; (ii) an affirmative obligation to participate in the investigation of other potential non-theft agreements between the defendants and other employers; (iii) the obligation for each defendant to inform its U.S. employees and personnel officers, as well as the entire railway industry, of the transaction and its obligations; and (iv) the Division`s new approval decrees, which aim to improve the effectiveness of the decree and the department`s future ability to enforce it. In the spring of 2018, Senators Cory Booker (D-NJ) and Elizabeth Warren (D-Mass) introduced legislation called The End Employer Collusion Act to “prohibit employer-to-employer agreements that directly limit the current or future employment of a worker.” In their bill, franchise agreements are explicitly cited as objectives of the legislation.