Q: Is proof of conspiracy required to state a claim that a no-poach agreement violated antitrust laws?

A: Many recent no-poach agreement antitrust claims have risen within the franchise context, where the alleged agreement was plainly described in the operative franchise agreements. In those cases, the parties fought over what standard of review should apply to the undisputed agreement. However, franchise cases are the exception not the norm. Many, if not most, Sherman Act Section 1 claims rise or fall on the plausibility of the allegations of an agreement, often oral, between the accused firms. Recently, the Ninth Circuit affirmed a district court’s dismissal of a factually threadbare no-poach antitrust claim. In Fonseca v. Hewlett-Packard Co.,[1] a former employee of Hewlett-Packard Co. (HP), who was fired by HP and not hired by one of HP’s competitors, alleged HP had entered into an illegal no-poach agreement with the competitor. Highlighting that no-poach antitrust cases require more than simply allegations of agreements and parallel conduct, the Ninth Circuit upheld the district court’s dismissal because the allegations of a conspiracy did not make sense and were not plausible. The decision serves as a poignant reminder that despite the class action bar’s and various government enforcement agencies’ (FTC, DOJ, and states attorneys general) stated desire to use the antitrust laws to protect employees’ wages and mobility, the law requires sufficient proof of a conspiracy to get beyond the pleadings stage of litigation.
Continue Reading No-Poach Case Against HP Dismissed for Failure to Allege a Plausible Conspiracy

Q: May employers require that employees enter into agreements as a condition of employment, mandating them to arbitrate employment-related claims?

A: Not without risk. California Assembly Bill (AB) 51 bans mandatory arbitration agreements as a condition of employment, but before the statute went into effect, a California federal district court entered an injunction effectively blocking enforcement of AB 51. On September 15, a Ninth Circuit panel reversed the district court’s injunction. The Ninth Circuit panel’s decision does not take effect immediately, however, and it is very likely that the panel’s decision will be challenged and that further legal filings will result in the district court’s injunction remaining in effect for some period of time. In the meantime, California employers that continue to use mandatory arbitration agreements face risk and uncertainty.
Continue Reading Ninth Circuit Restores California’s Ban on Mandatory Employment Arbitration Agreements

Q: My Company’s standard employment settlement agreement includes a no-rehire provision. Can I continue to include that provision for California employees?

A: If the agreement settles an employment dispute with an “aggrieved person,” you may no longer include a no re-hire provision in the agreement for California employees. Assembly Bill No. 749 (“AB 749”), which amends the California Code of Civil Procedure, became effective January 1, 2020 and provides that if an unlawful no-rehire provision is included in a settlement agreement, the provision is void as a matter of law. An “aggrieved person” is defined as a person who has filed a claim against the employer in court, before an administrative agency, in an alternative dispute forum, or through the employer’s internal complaint process.
Continue Reading California Now Prohibits No-Rehire Provisions in Certain Employee Settlement Agreements