No-Poach Agreements

By Sonam Mathur & Shubhang Joshi & Shashank Mehrotra

Definition

‘No-poach’ agreements are agreements between employers to not hire employees from each other. There are two types of no-poach agreements:

1. A non-solicitation or non-solicit – parties agree not to actively approach employees of the other party for hiring, but this does not foreclose them from considering job applications from the other parties’ employees.

2. A no-hire agreement is a broader agreement by which the parties agree not to approach employees of another party, and not to hire them even if the employee actively applies for an open position.

No-poach agreements may be sector-wide or only involve a few parties, and may be one-way or two-way in nature i.e., bind only one party or be reciprocal.

Commentary

Theories of harm

No-poach agreements can cause anti-competitive effects in the labour market through the following:

1. They reduce price competition for labour. Employees are foreclosed from receiving offers with higher wages from potential employers and at the same time, the current employer does not have any incentive to offer higher wages since there is no competitive threat to the employer;

2. They prevent the efficient allocation of productive employees to productive firms. Firms have an incentive to hire more employees if it is profitable to expand output, and a prohibition on hiring employees from competitors would also affect sectoral productivity in the market due to inefficient allocation of resources (i.e., employees);

3. They reduce innovation as employees are restrained from moving to firms where their efforts to innovate may be better incentivised; and

4. They may cause a reduction in output and an increase in prices of the downstream goods and services markets.

India

In India, Section 3(3) of the Competition Act, 2002 (Competition Act) explicitly prohibits entering into agreements that inter alia directly or indirectly determine purchase or sale prices (Section 3(3)(a)), or limit or control supply of services (Section 3(3)(b)). Such agreements are presumed to lead to an appreciable adverse effect on competition.

Until recently, the CCI had not examined potential competition issues in the labour market. In August 2025, the CCI initiated a cartel investigation against certain fragrance and fragrance-ingredient manufacturers. Through a leniency application, the CCI was informed of a “gentleman’s agreement” not to hire or poach employees from rivals or customers, whether in India or globally. ¹ A writ petition (and a subsequent intra-court appeal) challenging the CCI’s order was dismissed by the Delhi High Court in early 2026. In the order dismissing the intra-court appeal, the court noted the theory of harm identified by the CCI in its prima facie order. The market regulator observed the importance of the ability of a worker to command reasonable wages in the labour market and highlighted its role in protecting workers from “labour exploitation and to promote competitive remuneration”.

Comparative Analysis

In the United States, the framework is grounded in Section 1 of the Sherman Antitrust Act, 1890. The seminal enforcement action on no-poach agreements was the High-Tech Employee Antitrust Litigation (2010)², in which the Department of Justice (DOJ) required several Silicon Valley companies to terminate bilateral no-solicitation agreements for engineers. In 2016, the DOJ and Federal Trade Commission (FTC) issued the Antitrust Guidance for Human Resources Professionals³, declaring naked wage-fixing and no-poach agreements per se illegal and subject to criminal prosecution. This was superseded on 16 January 2025 by the Antitrust Guidelines for Business Activities Affecting Workers⁴, which extended coverage to non-compete clauses, training repayment provisions, and independent contractors.

In the UK, the Competition and Markets Authority also released a guidance note titled ‘Competing for talent’, providing a comprehensive overview of antitrust concerns in the labour markets, including a detailed section on potential conduct that can raise issues such as wage fixing through recommended pay rates, exchange of information concerning future pay intentions etc.⁵

The European Commission (EC) in its Competition Policy Brief: Antitrust in Labour Markets⁶ classified no-poach agreements as by-object restrictions constituting a buyers’ cartel characterised as an agreement on the sharing of supply sources under Article 101(1)(c) of the Treaty on the Functioning of the European Union. On 2 June 2025, the EC issued its first enforcement decision on no-poach agreements in Food Delivery Services.⁷ When Delivery Hero acquired a minority interest in its rival, Glovo, it entered into a shareholders’ agreement (SHA) with no-hire clauses for certain employees; this was later expanded to a non-solicitation agreement for all employees of the companies. The EC held that these agreements would have negative effects on wage levels in the market, thus preventing efficient allocation of productive employees to productive firms. The non-solicit clause could not be justified as an ancillary restraint, as it was unlimited in duration and territory, de facto reciprocal, and not proportionate to protecting investor value in Glovo as it did not apply to all the investors in Glovo.

Interestingly, in April 2026, the Court of Justice of the European Union (CJEU) in Tondela held that no-poach agreements could be justifiable in certain exceptional situations.⁸ The matter involved a no-poach agreement among Portuguese football clubs arising from the COVID pandemic era. The CJEU noted that the no-poach agreements constituted a manifest restriction of a competitive parameter in high-level sport. However, considering the challenging context of the pandemic, the CJEU held that there may be exceptional circumstances in which courts must undertake an assessment on whether the agreement must be assessed as restrictive by effect, and not restrictive by object. This matter is now before the Portuguese competition authority.⁹

Competition authorities of numerous other jurisdictions including France¹⁰, Italy¹¹, Poland¹², Romania¹³, the Netherlands¹⁴, and Turkey¹⁵, have also undertaken enforcement action against no-poach agreements.

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1. Suo Motu Case No 02 of 2025; Aditya Kalra, 'India Probes Fragrance Giants Givaudan, Firmenich, IFF Over Deals, Not-Poach' Reuters (17 March 2026) https://www.reuters.com/sustainability/boards-policy-regulation/india-probes-fragrance-giants-givaudan-firmenich-iff-over-deals-not-poach-2026-03-17/ accessed 25 May 2026.↩︎

2. In re High-Tech Employee Antitrust Litigation 856 F Supp 2d 1103 (ND Cal 2012).↩︎

3. US Department of Justice and Federal Trade Commission, Antitrust Guidance for Human Resources Professionals (Joint Guidance, October 2016).↩︎

4. Federal Trade Commission, Antitrust Guidelines for Business Activities Affecting Workers (Policy Document, 2024).↩︎

5. Competition and Markets Authority, Competing for talent (Guidance Note, 2025).↩︎

6. European Commission, Antitrust in Labour Markets (Competition Policy Brief, Issue 2, May 2024).↩︎

7. (Case AT.40795), Commission Decision C-2025-3304 [2025].↩︎

8. Case C-133/24 Liga Portuguesa de Futebol Profissional and Others v Autoridade da Concorrência (CD Tondela) EU:C:2026:362.↩︎

9. Autoridade da Concorrência, Decision PRC/2020/1 of 28 April 2022, Liga Portuguesa de Futebol Profissional and 31 football clubs.↩︎

10. Autorité de la concurrence, Decision No 17-D-20 of 18 October 2017; Press Release of 11 June 2025.↩︎

11. Francesca McClimont, 'Italy launches first no-poach cartel probe' (Global Competition Review, 2026) https://globalcompetitionreview.com/article/italy-launches-first-no-poach-cartel-probe accessed 27 July 2026.↩︎

12. Polska Liga Koszykówki (UOKiK Decision No DOK-1/2022, 20 October 2022).↩︎

13. Consiliul Concurenței, Decision No 311/2025, Alten, Akkodis, Automobile-Dacia, Bertrandt, Expleo, FEV, Renault and Segula.↩︎

14. Dutch Court of Appeal, Decision of 5 April 2010, Case No HD 200,056,331.↩︎

15. Turkish Rekabet Kurumu, Decision of 26 May 2011 (Case 11-32/650-201).↩︎