Insights | February 2, 2023

Anti-poaching agreements questioned by both trade unions and competition authorities

Agreements prohibiting the solicitation of another company's employees (so-called anti-poaching agreements) have become a focus point of the authorities in Finland, on an EU level and in the United States. The issues arising from anti-poaching or non-competition clauses are being looked at both by trade unions, for the purpose of safeguarding employee rights, and by competition authorities to ensure that agreements between companies do not distort competition.

An employee’s right to choose

In Finland, trade unions have been arguing for some time that anti-poaching agreements constitute a violation of employees’ rights to freely choose their employer. In a long-awaited decision, the matter was recently opined upon by the Parliamentary Ombudsman of Finland (decision (30.12.2022/EOAK/7667/2021).

The Ombudsman concluded that anti-poaching agreements in the health care sector were both unlawful and discriminatory. The decision comes in the midst of a heated public debate concerning insufficient resources in the social and health care sector and the need to attract more people to work in the sector. Thus, not surprisingly, further action focusing on anti-poaching agreements is expected in the form of both judicial guidance and litigation.

The prohibition against anti-competitive agreements entered into between companies

It is a well-established fact that companies are under an obligation to ensure that they do not enter into anti-competitive agreements, this concept being interpreted very broadly. Thus, it is no surprise that, in the face of global competition for skilled workers, competition authorities have started to pay closer attention to non-solicitation and non-recruitment agreements.

The most vocal and visible stance has been adopted by the Federal Trade Commission and the Department of Justice in the US. Both agencies have made it clear that they will continue to take enforcement actions, both criminal and civil, against non-poaching agreements. The European Commission is following its US counterparts closely, showing clear indications of increased interest in non-poaching agreements. No doubt national competition authorities are likely to follow suite.

Companies, their HR professionals as well as recruitment consultants are well advised to take note of this trend and ensure that all non-solicitation, non-recruitment and other clauses limiting employees’ freedom of movement are in line with existing guidance. As the war for talent increases in many sectors and across country borders, law enforcement authorities are highly likely to want to make their contribution to the free movement of employees seen and heard.