A recruiter told me they don’t hire people at my company. Is that legal?

//

salahilaw.com

dream job, looking for, seek

People look for new jobs for many reasons, including better compensation and benefits. Depending on your line of work, there might only be a few major companies looking to hire people with your skills and experience.

We sometimes hear about employees who think they have a promising job lead, only to be told by a recruiter or hiring manager that they can’t proceed because their company doesn’t hire people who work at your company.

That’s not necessarily illegal—but it’s a major red flag. It might not be illegal if, for example, a company makes an independent decision that it won’t hire people from certain companies. But if the policy is the product of an agreement or understanding with a competitor, that no-hire rule is no longer lawful, and can result in criminal charges or costly civil litigation.

Why would an employer implement a no-hire rule like that? After all, most companies want to have the freedom to hire the best talent. A rule that a company won’t hire from its competitors arbitrarily limits its ability to recruit and hire the most talented people. And when you can’t compete for the best talent, you put yourself at a competitive disadvantage.

So, at first blush, a no-hire rule doesn’t make a whole lot of sense. But it can in one specific scenario: when an employer’s competitors are also on board with the practice to help keep compensation lower across the board. That scenario—where many competitors make a decision that would seem to go against their economic self-interest if they were to go it alone—can indicate unlawful collusion.

So if you’ve been told you’re not eligible for hiring because of where you work, you may want to consult an antitrust attorney for advice on whether you’ve been harmed. Companies that collude not to compete for workers—through no-hire, no-solicitation, wage-fixing, or other rules designed to limit employee mobility—don’t only hurt people who want to switch jobs. They actually hurt all employees, because such agreements are meant to prevent bidding wars and stabilize salaries and wages for everyone who works at those companies.

So if you’ve heard about a no-hire rule at your company or another employer, you may want to consult an antitrust attorney about that, too, even if you yourself aren’t applying to change jobs. You can use the contact form below to contact Salahi PC for a free evaluation.