Competition in Labor Markets: Current Approaches to No-Poaching Agreements
Recently, labor markets and the conditions of competition in these markets have attracted considerable attention from competition authorities. In particular, concerns such as no-poach agreements, wage-fixing practices, and the exchange of sensitive employment information have become subjects of investigation in various jurisdictions, including the US and the EU. In Türkiye, it is likewise observed that the Competition Authority is closely monitoring developments in this area and that its interest has been growing significantly. These developments clearly demonstrate that undertakings are required to exercise utmost care not only in their conduct within goods and services markets but also in their practices related to employment relationships, within the framework of competition law.
I. Guidelines
1. Antitrust Guidelines on Business Activities Affecting Workers
The Antitrust Guidelines for Business Activities Affecting Workers (Guidelines) jointly published by the U.S. Department of Justice Antitrust Division (DOJ) and the Federal Trade Commission (FTC) on January 16, 2025, set forth important regulations concerning business practices that affect competition in labor markets.
The Guidelines outline the current framework for the application of antitrust law to human resources practices. The key points concerning no-poaching practices as provided in the Guidelines are summarized below:
- The Guidelines state that practices such as no-poaching, non-solicitation, or refraining from extending job offers constitute per se violations of competition law when conducted between actual or potential competitors.
- It is emphasized that regardless of whether such agreements are written, oral, explicit, or implicit, allegations that the parties acted with the intent to restrict competition are sufficient for the case to proceed.
- In the context of franchising, clauses between the franchisor and franchisee or among franchisees that mutually prohibit the solicitation or hiring of employees are considered direct restraints of competition.
- The exchange of competitively sensitive information between undertakings competing for labor, including indirect sharing through third parties or intermediaries, is also deemed unlawful. In this regard, the sharing of data through algorithms or software used by third parties to recommend wages or fringe benefits may be considered anticompetitive even if undertakings do not follow the recommendations.
- Contractual provisions that restrict employees’ freedom to resign from their current job may also be considered unlawful under antitrust law. In this context, non-compete clauses that prevent employees from working for competing or potentially competing employers, starting a new business, or impose penalties for resignation may raise competition law concerns.
- The fact that undertakings do not operate in the same product market or are engaged in different forms of economic cooperation (e.g. joint ventures) does not necessarily eliminate their status as competitors in labor markets. Accordingly, competition for labor supply may still be relevant.
You may access the full text of the Guidelines here.
2. Guidelines on Competition Infringements in Labor Markets
On 3 December 2024, the Turkish Competition Authority (TCA) published its Guidelines on Competition Infringements in Labor Markets (Guidelines).
Key assessments in the Guidelines regarding no-poaching agreements are summarized below:
- The Guidelines define no-poaching agreements as arrangements, either direct or indirect, whereby one undertaking agrees not to solicit or hire the employees of another undertaking.
- The Guidelines emphasize that the absence of an explicit prohibition on hiring employees is not, by itself, sufficient to conclude that no-poaching has not occurred. For example, requiring approval from another undertaking prior to recruitment may also be deemed a no-poaching arrangement.
- The Guidelines clarify that such agreements may cover not only current employees but also former employees. The decisive factor is whether there is a mutual understanding between competing undertakings that restricts employee mobility.
- The Guidelines state that no-poaching agreements constitute a restriction of competition by means of market allocation under Article 4(1)(b) of Law No. 4054 on the Protection of Competition (Law No. 4054).
- Accordingly, no-poaching agreements will be treated within the same legal framework as supplier or customer allocation agreements, and if they aim to restrict competition, they will be qualified as cartels.
- The Guidelines clarify that no-poaching agreements need not be concluded directly between the parties; they may also be concluded through a third party and still constitute a competition violation. In such cases, third parties may also be considered as parties to the violation, depending on the specific circumstances.
You may access the full text of the Guidelines here.
II. Notable Recent Decisions
A. Global Decisions
1. The Arrington v. Burger King Worldwide, Inc. Decision Dated 09.04.2025
In the case of Arrington v. Burger King Worldwide, Inc., heard in the United States, the court evaluated whether the no-hire provisions agreed upon between Burger King Corporation (Burger King) and its franchisees constituted a restraint of trade under Section 1 of the Sherman Antitrust Act. The relevant clause, included in franchise agreements, prohibited a Burger King franchisee from hiring another franchisee’s current employee or any employee who had left within the past six months, unless the former employer provided written consent.
The claimants alleged that Burger King entered into agreements not to compete in the labor market with the intent of depressing wages and limiting job opportunities. They argued that such arrangements amounted to a “per se” violation of antitrust law. In contrast, Burger King contended that the agreements did not constitute a “per se” violation and should instead be assessed under the “rule of reason” standard. Burger King further asserted that the agreements were vertical in nature and therefore did not amount to an antitrust violation.
U.S. District Judge Jose Martinez denied Burger King's motion to dismiss. The court held that the claimants’ allegations, asserting that each defendant knowingly joined the agreement and acted with the purpose of restricting the market, were sufficient for the case to proceed.
Under the franchise structure at issue, more than 99% of Burger King restaurants are operated by independent franchisees. These franchisees are subject to no-hire clauses included in standard franchise agreements with Burger King. Referring to the American Needle v. NFL decision of the U.S. Supreme Court, the court noted that the no-hire agreement eliminated independent hiring decisions among franchisees and therefore centralized decision-making in the labor market. Furthermore, the court emphasized that each franchisee maintains its own hiring process and that there is no relationship of trust among the franchisees. The no-hire provision undermines this independence and restricts competition in the labor market.
The court also stated that the applicable legal standard (per se or rule of reason) would be clarified based on the evidence collected during the course of the proceedings.
You may access the decision here.
2. The Delivery Hero – Glovo Decision Dated 02.06.2025
The European Commission (Commission) concluded its investigation into Delivery Hero SE (Delivery Hero) and Glovoapp23, S.L. (Glovo) concerning their alleged gentlemen’s agreement not to hire each other’s employees in the online food delivery sector. The Commission found that the parties violated EU competition rules by agreeing not to compete in the labor market between July 2018 and July 2022 — during a period in which Delivery Hero only held a minority stake in Glovo.
Under the no-poach agreement, the undertakings committed not to hire each other’s employees, which limited job opportunities, wage levels, and career development for workers. In addition, the Commission established that the undertakings engaged in the exchange of competitively sensitive information and allocated markets among themselves.
The Commission found that the conduct was coordinated through Delivery Hero’s minority shareholding in Glovo. In this respect, the decision constitutes not only the first fine imposed at the EU level for a no-poach agreement but also the first enforcement action based on a competition violation facilitated through a minority shareholding in a rival undertaking.
Both undertakings acknowledged their participation in the no-poach agreement and cooperated with the Commission under the settlement procedure. As a result of the settlement, the Commission imposed administrative fines of EUR 223 million on Delivery Hero and EUR 106 million on Glovo. The Commission emphasized that the decision sets an important precedent for the protection of free competition in labor markets and underlined the importance of encouraging employers to compete for talent.
You may access the decision here.
B. Turkish Competition Board Decisions
1. Kocaeli Private Schools Decision Dated 18.04.2024
In the investigation conducted by the Board concerning private schools operating in Kocaeli, it was determined that the schools jointly set tuition and meal fees and entered into agreements not to poach each other’s employees. As a result of the examinations, it was revealed that the schools acted in coordination through WhatsApp groups and meetings in order to prevent teacher transfers and to jointly determine employee wages. In the decision, these practices — including refraining from transferring teachers from competing schools, not making job offers, and rejecting applications — were assessed by the Board as no-poach and wage-fixing agreements, and were considered a violation of Article 4 of Law No. 4054.
The Board classified these practices related to the labor market as a cartel; and for some undertakings that accepted the violation, a 25% reduction in administrative fines was applied following the settlement procedure.
You may access the decision here.
2. Decision on French Private Schools Dated 24.04.2024
Within the scope of the investigation conducted concerning the labor market practices of French high schools operating in Istanbul, the Board obtained correspondences and findings indicating that school administrators came together to jointly determine school tuition fees and teacher salaries. The Board evaluated that these decisions were implemented in a similar manner by all schools, resulting in the elimination of independent pricing decisions and leading the undertakings to act in a coordinated manner.
The Board assessed that the conduct of jointly determining school tuition fees — both directly and indirectly — constituted a “cartel” under the Regulation on Administrative Fines to Apply in Cases of Agreements, Concerted Practices and Decisions Limiting Competition and Abuses of Dominant Position (Fines Regulation). In addition, the Board concluded that administrative fines should also be imposed on the undertakings in question under the “cartel” category of the Fines Regulation due to their joint determination of teacher salaries.
You may access the decision here.
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