Employer Update: DOJ Drops Final No-Poach Prosecution Case

On November 13, 2023, the U.S. Department of Justice (“DOJ”) moved to drop its last remaining no-poach criminal prosecution case, U.S. v. Surgical Care Affiliates LLC, et al.  This marks an informal end to the DOJ’s three-year campaign to charge and prosecute suspected violators of no-poach agreements.  By way of quick background, in those types of agreements, two or more employers enter in an agreement to restrict their hiring, recruitment, salaries, and general terms of employment with other firms vying for similar workers. The dismissal of the Surgical Care Affiliates case is the most recent update in a series of losses by the Justice Department in this area, most recently recovering from the April 2023 dismissal by U.S. District Judge Victor A. Bolden in U.S. v. Patel, et al. that we blogged about in May 2023 .  Also, see our blog post from November 2022 here  involving the first no-poach criminal plea deal.  As of the present time, the DOJ has failed to garner a single jury conviction on any of its no-poach agreement criminal prosecutions.

The DOJ has not offered any formal explanation or comment about what the future may bring for no-poach criminal prosecutions, leaving employers and employees alike questioning what may occur.  For the time being though, employers should take some level of solace in the fact that there are no more charged no-poach criminal prosecutions pending.  While civil liability remains a possible source of litigation and liability, the ramifications of a civil versus a criminal judgment speak for themselves.  That said, employers are reminded to tread cautiously before entering into any no-poach agreements, and they are encouraged to consult with legal counsel to hopefully avoid becoming embroiled in any civil (or criminal) anti-competition litigation.