Polden on the Antitrust Implications of Restraints on Workers’ Wages and Mobility

Dean Emeritus Donald Polden has published Restraints on Workers’ Wages and Mobility: No-Poach Agreements and the Antitrust Laws in 59 SANTA CLARA L. REV. 577 (2020). Dean Polden focuses principally on two types of restraints on worker mobility and compensation – (1) “no-poach” agreements by which companies mutually agree to refrain from soliciting certain of each other’s employees and (2) agreements across companies to limit the compensation of certain classes of workers. Polden considers at length the relatively recent use of such agreements by prominent Silicon Valley technology companies and the economic and conceptual difficulties that government agencies and courts must confront in applying antitrust laws to these agreements. Polden highlights the harms to workers arising from these agreements—principally suppressed wages and inferior terms of employment—and argues that the agreements at issue “have few pro-competitive justifications.” Ultimately, he rejects application of a “rule of reason” analysis and argues instead for application of a “per se” rule and “quick-look” analysis for antitrust claims relating to these restraints on worker mobility and compensation. “Courts should steer away from application of the rule of reason in cases involving no-poach and similar highly restrictive covenants or agreements because such analysis produces greater uncertainty for resulting litigation. In contrast, the clarity enabled by judicial application of the per se and quick-look forms of analysis in Section 1, Sherman Act cases can prevent the most egregious forms of cartel wage suppression such as no-poach and no-hire agreements by providing clear guidance to corporations.”