Trade Secrets & Employee Mobility

A Ruling and Order issued on April 28, 2023 by the U.S. District Court for the District of Connecticut in United States v. Patel, et al. ran the government’s losing streak to four failed trials seeking to criminally prosecute alleged wage-fixing and no-poach agreements. 

To review, in 2016 the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) issued Antitrust Guidance for Human Resources Professionals that warned of potential criminal prosecution for so-called “naked” no-poach agreements, i.e., agreements among competing businesses to restrict hiring or compensation of employees, untethered to any legitimate collaborative relationship. 

In January of this year, our colleagues Janene Marasciullo and David Clark wrote about federal criminal indictments issued for naked wage-fixing and no-poach agreements. They warned that these federal indictments should serve as a cautionary tale for HR and other company executives. The Illinois Attorney General’s office recently reinforced that warning at the state level.

An Illinois court recently denied a motion to dismiss an action by the Illinois Attorney General’s Office–Antitrust Unit against a manufacturing company and three staffing agencies alleging that ...

In the past month, the U.S. Department of Justice (DOJ) has made good on its 2016 threat, contained in its Antitrust Guidance for Human Resource Professionals (“Antitrust Guidance”) to bring criminal charges against people or corporations who enter into naked wage-fixing agreements or naked no-poach agreements.   First, as reported here, on December 9, 2020, DOJ obtained an indictment against the president of a staffing company who allegedly violated Section 1 of the Sherman Act by conspiring with competitors to “fix wages” paid to physical therapists (PT) and physical ...

Earlier this month, the U.S. Department of Justice (“DOJ”) announced that a federal grand jury in Texas indicted Neeraj Jindal, the former owner of a physical therapist staffing company, in connection with an illegal wage-fixing conspiracy to depress pay rates for physical therapists (“PTs”) and physical therapist assistants (“PTAs”) who travel to patients’ homes or assisted living facilities in the greater Dallas-Fort Worth area.  The indictment was something of a landmark for the U.S. Department of Justice (“DOJ”), which for years had promised that such ...

Financial analytics firm Novantas, Inc. and two individual defendants closed out 2017 with a victory, securing the dismissal of claims by rival First Manhattan Consulting Group LLC (“First Manhattan Consulting Group”) [1], which accused them of competing unfairly by poaching First Manhattan Consulting Group’s employees in order to steal its trade secrets.  The result demonstrates the need for plaintiffs in such cases to be able to prove with specificity which trade secrets were taken or threatened by the defendants’ conduct.

The Complaint alleged that Novantas engaged ...

One of the top stories on Employment Law This Week – Epstein Becker Green’s new video program – is about a bad leaver and the hefty price he had to pay.

A former VP of Fortinet, Inc., must pay nearly $1.7 million to the company, after poaching three of his subordinates when he left his job for a competitor. The former VP joked in an email that the employees he took with him were “three bullets to the back of the head” of his former employer. In the arbitration, a former California state judge ruled that the employee had breached his fiduciary duty and his contractual obligations not to ...