In the previous episode of this series, Mayer Brown discussed the implications of sharing sensitive HR information when the Competition Ordinance comes into force. Colin is now puzzled by the potential problems relating to non-solicitation agreements…
Colin: You mentioned that a non-solicitation agreement with a competitor could pose “problems” under the Competition Ordinance. What kind of “non-solicitation agreement” were you referring to?
Mayer Brown: I was referring to an agreement between competitors operating in the same market not to solicit employees from each other. In fact, a simple arrangement or acknowledgement not to poach a competitor’s employees may violate the Competition Ordinance.
Colin: But I don’t understand. How would this affect competition?
Mayer Brown: This type of non-solicitation arrangement would restrict an employee's mobility, which would in turn distort competition in the job market.
In fact, the legality of this type of non-solicitation agreement came under scrutiny recently in a high profile antitrust court case in the United States involving key players in the technology industry. The case eventually ended with an agreement to settle with the affected employees, but by August 2014, the settlement sum was still in dispute.
Colin: Okay, I won’t get involved in any non-solicitation arrangement with a competitor then…