The Turkish Competition Authority (“Authority”), in its reasoned decision dated July 26, 2023 and numbered 23-34/649-218 and published on July 10, 2025 (“Decision”), has clearly established that restrictions on employment between undertakings may constitute anti-competitive agreements within the scope of Article 4 of Law No. 4054 on the Protection of Competition (“Competition Law”). The Decision analyzes the impact of no-poach agreements—particularly among undertakings operating in sectors such as software and e-commerce—on the labor market and sets out important criteria for determining when and how such agreements violate competition law.
The Authority's investigation focused on agreements not to employ each other's personnel between undertakings in various sectors. The Authority concluded that the effects of these agreements arise not in the end product or service markets, but in the labor market, which functions as a critical input for production. As such, market analysis was carried out primarily based on labor market dynamics.
The undertakings subject to the investigation included companies from various sectors such as software, e-commerce, retail, logistics, food, advertising, and telecommunications. The scope of the no-poach agreements in question often extended beyond specific departments such as engineering, human resources, or marketing, and covered nearly all employees of the undertakings involved.
According to the Authority, in order to establish an infringement under Article 4 of the Competition Law, the existence of a concurrence of wills between undertakings is sufficient, even in the absence of a written agreement. Implicit, verbal, or de facto understandings may also be considered “agreements” for the purposes of competition law. No-poach agreements may take various forms, including a mutual commitment not to solicit each other's employees, refusing to hire candidates from rival firms even if they apply, or refraining from hiring individuals solely because they were formerly employed by a competitor. In some cases, mutual consent mechanisms have been used, but such mechanisms do not eliminate the existence of an infringement.
The Authority evaluated no-poach agreements as “by-object restrictions”. It concluded that these agreements suppress wages, reduce labor mobility, and ultimately have adverse effects on overall economic welfare, including consumer welfare. The Authority found that undertakings were aware of the fact that employee movement triggers wage increases, and that the true purpose of no-poach agreements was to control labor costs. Thus, these practices were considered to have similar effects to price-fixing agreements.
The Decision reveals that terms such as “off-limits”, “blacklist” and “gentlemen's agreement” were frequently used among undertakings and that such expressions may indicate the existence of a restrictive agreement. Furthermore, it was emphasized that even in the absence of a formal agreement, the exchange of competitively sensitive information—such as employment benefits, bonuses, or hiring strategies—among undertakings may also constitute a competition law infringement.
The Decision draws a clear distinction between no-poach agreements and individual non-compete agreements made between employer and employee under Articles 444–447 of the Turkish Code of Obligations (“Code of Obligations”). According to the Authority, non-compete clauses under the Code of Obligations must: (a) be specific to certain employees; (b) be in written form, subject to judicial review, and limited in scope and duration; and (c) be based on a legitimate justification and must not jeopardize the employee's economic future. In contrast, inter-company no-poach agreements are typically unwritten, developed without employee knowledge, apply to all employees, and are based on mutual understandings between undertakings. As such, they should not be confused with employment law-based individual restrictions and must be assessed as competition law violations.
The Authority also noted that some no-poach provisions may be considered legitimate “ancillary restraints” under specific conditions. As also stated in the Authority's guidelines, obligations not to hire the employees of a target company in merger or acquisition transactions—along with non-compete and trade secret protection clauses—may be deemed lawful provided that they are proportionate and limited in scope and duration. However, such exceptions must be interpreted narrowly, and it should not be assumed that every no-poach provision qualifies as an ancillary restraint. In practice, the Authority has only recognized such exceptions in the context of genuine acquisition transactions and emphasized the need for proportionality regarding contract duration and scope.
Additionally, in the dissenting opinion attached to the Decision, reference was made to the Authority's established case law of calculating administrative fines based on net sales recorded in the statutory chart of accounts. The dissent criticized the use of an alternative method that proposes calculating fines by proportionally allocating employee costs from total turnover. The characterization of the conduct as a “cartel” was also challenged, on the grounds that many of the undertakings involved maintain vertical business relationships, which would preclude the existence of a horizontal collusion. It was therefore argued that the conduct should have been evaluated under different types of infringement and subjected to a lower penalty.
This Decision constitutes a landmark precedent in addressing anti-competitive agreements among undertakings in the labor market. In light of this ruling, any direct or indirect restrictions on hiring imposed by undertakings pose significant competition law risks. It is therefore critically important that human resources policies are reviewed regularly to ensure compliance with competition law. The Decision represents a major step toward protecting employee economic freedom and safeguarding competition in labor markets.
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