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Businesses can’t agree not to ‘poach’ employees

It might be tempting to informally agree with other business owners in a niche field not to poach one another’s employees, but it’s illegal – and recently, some businesses have paid a high price.

For example, the Department of Justice went after several tech companies that allegedly had an informal “no-poach” understanding. The employees themselves then filed a class action, which resulted in a $415 million settlement.

In another case, eight hospitals in the Detroit area paid $90 million to settle claims that they had exchanged information with one another about how much they paid their nurses. The hospitals had allegedly conspired to limit the nurses’ salaries, rather than competing with each other by raising wages.

And a class action has now been filed against Duke University and the University of North Carolina, alleging that the schools secretly agreed not to recruit each other’s faculty and staff.

The antitrust laws include severe penalties for conspiring to restrain trade, which is what all these businesses were accused of doing.

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