A „no poaching agreement” is a type of agreement between companies that involves a promise by one company not to hire the employees of another company. These types of agreements have come under scrutiny by the European Union (EU) Competition Law because they can limit competition and harm employees` job mobility.
The primary concern with no poaching agreements is the potential for companies to collude and restrict competition by agreeing not to hire each other`s employees. This behavior can lead to a decrease in job opportunities and lower salaries for employees as companies may not be incentivized to offer competitive salaries or benefits if they know their competitors cannot poach their workers.
The EU Competition Law prohibits agreements between companies that limit competition in any way. The law considers no poaching agreements to be anti-competitive because they can prevent employees from seeking better job opportunities and limit competition in the job market.
Violations of EU Competition Law can result in significant fines for companies involved in no poaching agreements. As of 2021, the EU has taken a strong stance against these types of agreements, with the European Commission announcing that it would investigate no poaching agreements and other anti-competitive practices in the tech industry.
While no poaching agreements can appear to benefit companies at first, they ultimately harm employees and limit job mobility. Companies must take care to ensure that their hiring practices do not violate EU Competition Law and to encourage fair competition in the job market.
In conclusion, the EU Competition Law prohibits no poaching agreements between companies due to their potential anti-competitive effects, including limiting job opportunities and salaries for employees. Companies must comply with the law and promote healthy competition in the job market to ensure fair and equal opportunities for all employees.