United States: "No-Poaching" Agreement Takes Center Stage In Class Certification Case Against Backdrop Of Heightened Federal Scrutiny

Now when the US Department of Justice (DOJ) is expected to bring its first criminal antitrust cases based on "no-poaching" agreements, a recent federal district court decision in Seaman v. Duke University1 highlights the private causes of action based on such agreements. The facts of the case further remind us of the Antitrust Guidance for Human Resource Professionals, issued by the DOJ and Federal Trade Commission (FTC), and how antitrust laws apply to the employment marketplace.


In Seaman, the plaintiff alleges that the defendants, which include entities and individuals affiliated with Duke University and the University of North Carolina at Chapel Hill,2 "conspired and agreed that the Duke defendants would not hire or attempt to hire faculty employed by the UNC defendants, and vice-versa."3 The lawsuit stems from the plaintiff's attempt to apply for an opening at UNC while she was still employed as a faculty member at Duke.4 In response to her application, the plaintiff received an email advising her that "'lateral moves of faculty between Duke and UNC are not permitted' due to a 'guideline which was agreed upon between the deans of UNC and Duke a few years back.'"5

The plaintiff brought suit alleging that the defendants' agreement violated federal antitrust law and "suppressed compensation throughout the defendants' medical schools and healthcare facilities."6 She further sought "to certify a class of faculty, physicians, nurses, and skilled medical staff that worked for the defendants."7

On February 1, 2018, the US District Court for the Middle District of North Carolina certified a class consisting of more than 5,400 faculty members8. While the court declined to include non-faculty members in the class, the court left open the possibility that non-faculty could pursue a separate class action. The court further left open the possibility of individual suits by faculty on other grounds.

Court permits antitrust impact theories based on "preemptive compensation increases" and "internal equity structures"

With respect to faculty, the plaintiff asserted two theories under which the defendants' conduct suppressed compensation on a faculty-wide basis: one relating to "preemptive compensation increases," and a second relating to "internal equity structures."

Under the first theory, the plaintiff asserted that as a result of the alleged no-hire agreement, the defendants "did not have to provide preemptive compensation increases for faculty that otherwise would have been needed to ensure employee retention."9 On this point, she offered expert opinions that the defendants are "each other's main competitors for physicians who want to live in the Durham-Chapel Hill area," and that "lateral hiring competition between the defendants would encourage the defendants to preemptively increase compensation to retain faculty."10

Under the second theory, the plaintiff asserted that "the individual harm of decreased lateral offers and corresponding lack of retention offers" suppressed compensation across all faculty through internal equity structures, i.e., "policies and practices that are alleged to have ensured relatively constant compensation relationships between employees."11 On this point, the plaintiff offered expert evidence showing that "lateral hiring increases compensation for employees throughout an organization when that organization manages employee compensation to maintain parity within employment categories or to achieve compensation relationships between employee categories."12

The court agreed for purposes of class certification that the evidence supported both of the plaintiff's theories of antitrust impact for faculty and further agreed that the plaintiff's proposed damages analysis was consistent with those theories.13 After finding that the plaintiff had met the requirements of Rule 23(b)(3) and Rule 23(a), the court certified a class consisting of faculty members.14

The court was similarly persuaded by the plaintiff's internal equity theory with respect to non-faculty, although the theory relied on different evidence. At the class certification hearing, the plaintiff's counsel "confirmed it had no direct evidence of an agreement as to non-faculty and admitted the only circumstantial evidence was the evidence about the agreement as to faculty."15 Accordingly, in pursuing this theory for non-faculty, the plaintiff asserted that "the no-hire agreement as to faculty and the resulting suppression of faculty compensation spread to all non-faculty through the defendants' internal equity structures."16 The theory thus relied on the same economic principles concerning the defendants' internal equity structures, using evidence specific to non-faculty and relying on expert analysis to show that the impact on compensation was shared across faculty and non-faculty.17 As with the faculty, the court found that the plaintiff met the requirements to pursue this theory of antitrust impact for non-faculty and that the plaintiff proposed a damages analysis was consistent with that theory.18 Even so, the court declined to include non-faculty in the certified class, due in part to concerns that having all members in one class was "likely to cause significant confusion," and that "the strength of the faculty claim or the weakness of the non-faculty claim might tend to bleed over to the other claim in the jury's mind."19 The court expressly noted, however, that "[n]on-faculty class members may pursue a separate class action," thereby leaving open the possibility that non-faculty could successfully seek certification based on the same antitrust impact theory regarding internal equity structures.20

Court leaves open possibility of future claims by individual class members on other theories

In addition to leaving open the door to a separate class action suit by non-faculty, the court also noted the possibility that individual faculty class members could bring separate individual suits based on the same alleged no-hire agreement. As the court explained:

For example, the agreement may have suppressed an individual's compensation under [the plaintiff's] theories of class-wide liability, but the agreement also may have impacted and damaged an individual who missed out on increased compensation associated with a lateral move or lateral move offer. The class-wide and individual theories of impact and damages are not mutually exclusive, but only the class-wide theories are being asserted in this case.21

Citing Supreme Court precedent, the court expressed its view that "future claims based on theories of individual impact and damages" should not be barred by the outcome of the class action, "because those individual theories are not included in this certification order and may not be brought in this case."22 At the time of the court's decision, no individual cases had been filed against the defendants asserting antitrust claims based on the alleged no-hire agreement.23

Federal guidance regarding no-poaching agreements

The Seaman case also serves as a reminder of the Antitrust Guidance for Human Resource Professionals (Antitrust HR Guidance) and how antitrust laws can intersect the employment marketplace.

Issued by the DOJ and FTC in October 2016, the Antitrust HR Guidance "is intended to alert human resource (HR) professionals and others involved in hiring and compensation decisions to potential violations of the antitrust laws."24 Among other discussion points, the Antitrust HR Guidance advises that "[a]n individual likely is breaking the antitrust laws if he or she . . . agrees with individual(s) at another company to refuse to solicit or hire that other company's employees (so-called 'no-poaching' agreements)."25 The Antitrust HR Guidance distinguishes between "naked" no-poaching agreements and those that are "reasonably necessary to a larger legitimate collaboration between the employers."26 While the latter may not violate antitrust laws, the Antitrust HR Guidance advises that "[n]aked . . . no-poaching agreements among employers, whether entered into directly or through a third-party intermediary, are per se illegal under the antitrust laws."27

After noting previous civil enforcement actions concerning no-poaching agreements that ended in consent judgments, the Antitrust HR Guidance advises of the DOJ's intent to "proceed criminally" against such naked agreements in the future.28 The Antitrust HR Guidance explains that "[t]hese types of agreements eliminate competition in the same irredeemable way as agreements to fix product prices or allocate customers, which have traditionally been criminally investigated and prosecuted as hardcore cartel conduct."29 Criminal action against no-poaching agreements was also recently addressed by Makan Delrahim, Assistant Attorney General for the DOJ Antitrust Division. Speaking at a conference in January 2018, he stated that in the coming months the DOJ will bring its first criminal cases based on such agreements.30 Citing the Antitrust HR Guidance, he further advised that "[i]f the activity has not been stopped and continued from the time when the [Antitrust HR Guidance] was made . . . we'll treat that as criminal."31

Dentons' team will continue to follow developments in this area. If you have any questions or would like more information regarding the legal issues in the Seaman case or the Antitrust HR Guidance, please reach out to any of our key contacts.


1. Seaman v. Duke University, No. 1:15-CV-462, Mem. Op. & Order (M.D.N.C. Feb. 1, 2018).

2. The defendants in the case are Duke University, Duke University Health Systems, Dr. William Roper, the University of North Carolina at Chapel Hill, the University of North Carolina School of Medicine, the University of North Carolina Health Care System and Does 1-20.

3. Seaman, Mem. Opin. & Order at 2-3 (footnotes omitted).

4. Id. at 2.

5. Id. (internal quotation marks omitted). According to the opinion, "[t]he only exception to this alleged agreement was for faculty who received a promotion when they were hired." Id. at 3.

6. Id. at 1.

7. Id. The plaintiff sought certification under Rule 23(b)(3), "which requires that common issues predominate and that a class action is the superior method for resolution of the issues." Id. at 4. The UNC defendants settled after class certification discovery was complete, while the Duke defendants have decided to proceed. Id. at 3.

8. Seaman, Mem. Opin. & Order at 21, 24-25.

9. Id. at 8.

10. Id. at 10.

11. Id. at 9.

12. Id. at 12.

13.Id. at 9-14.

14. Seaman, Mem. Opin. & Order at 18, 21-25. The certified class was defined as "[a]ll natural persons employed by Defendants and their co-conspirators in the United States during the period from January 1, 2012 through the present . . . as a faculty member with an academic appointment at the Duke or UNC Schools of Medicine," with certain categories of individuals excluded. Id. at 25.

15. Id. at 3 n.2.

16. Id. at 14.

17. Id. at 14-15.

18. Id. at 15-17.

19. Id. at 20.

20. Seaman, Mem. Opin. & Order at 21 n.11. In addition, the plaintiff asserted a theory that certain non-faculty also were impacted "because they missed out on compensation increases associated with lateral moves undertaken in connection with a faculty-lead team." Id. at 15. The court found that the plaintiff did not meet the requirements to proceed based this separate theory. Id. at 16.

21. Id. at 23 n.13.

22. Id. at 23.

23. Id.

24. U.S. Dep't of Justice & Fed. Trade Comm'n, Antitrust Guidance for Human Resources Professionals 1 (2016) [hereinafter Antitrust HR Guidance], https://www.justice.gov/atr/file/903511/download?.

25. Id. at 3.

26. Id. at 3.

27. Id. The distinction between "naked" and permissible no-poaching agreements also was addressed in comments by FTC officials issued contemporaneously with the Antitrust HR Guidance:

Of course, not every interaction with a competitor creates antitrust risk. For instance, if your firm collaborates with other firms as part of a legitimate collaborative activity, no-poaching agreements or other restraints on recruiting workers may be reasonably necessary to that undertaking. Examples would be collaborations such as joint ventures, shared use of facilities, consulting services, outsourcing vendors, and mergers or acquisitions, among others. Unless the communication is part of a legitimate collaboration, you and others at your company should not communicate your employment or compensation policies to companies with whom you compete to hire employees, nor ask another company to go along.

Debbie Feinstein, Geoffrey Green, & Tara Isa Koslov, Fed. Trade Comm'n, Competitive job markets offer more than just fringe benefits, Oct. 20, 2016, https://www.ftc.gov/news-events/blogs/competition-matters/2016/10/competitive-job-markets-offer-more-just-fringe?utm_source=govdelivery.

28. Antitrust HR Guidance at 3-4.

29. Id. at 4.

30. Matthew Perlman, Delrahim Says Criminal No-Poach Cases Are in the Works, Law360, Jan. 19, 2018.

31. Id.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
26 Sep 2018, Conference, New York, United States

Dentons is delighted to support a global IT services and consulting firm Miratech as an event host partner at their annual conference called M-Force18 New York on September 27th. The event will be held at Dentons New York office in the heart of Midtown Manhattan, opposite Rockefeller Center.

2 Oct 2018, Seminar, Dallas, United States

We are pleased to offer a program of five sessions designed specifically for in-house counsel. Topics will include:

  • In-house corporate ethical issues
  • What recent Supreme Court decisions mean for business
  • Keeping lawyers out of your benefit plans
  • Litigation tactics for in-house counsel
  • Employment issues in the age of #MeToo
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions