No-Poach Agreements: Between the Restriction of the Right to Work and Anti-Competitive Violations
No-Poach Agreements: Between the Restriction of the Right to Work and Anti-Competitive Violations

Author(s): Lucaciu George-Doru
Subject(s): Law, Constitution, Jurisprudence, Labour and Social Security Law
Published by: Правни факултет Универзитета у Источном Сарајеву
Keywords: Labor; No-poach agreement; Competition; Non-discrimination;
Summary/Abstract: No-pouch agreements represent agreements between companies not to contact, recruit or offer work to the employees of a competing company ( those who work/worked at one of the companies involved). On the one hand, these agreements reduce the competitiveness of the workforce, as employees remain trapped for a long period of time without the possibility of freely choosing another job. This also leads to an infringement of the fundamental right to work, which is regulated and protected at both EU and national level by the provisions of the 2003 Constitution of Romania, republished. On the other hand, these agreements infringe anti-competitive rules, affecting the right of employers to recruit employees that work in similar fields/sectors of activity.Recently, an increased number of investigations organized by different authorities in several Member States are designed to discover and sanction no-pouch and wage-fixing agreements (e.g. in Lithuania, Poland, Hungary, Portugal).In Romania, the Competition Council investigates several companies that operate in the market of production of motor vehicles and/or other related activities (e.g. vehicle components and systems, testing, projecting). If these companies are proven to have violated anti-competitive rules, they risk fines up to 10%of their total turnover. This could be a major risk for them to face financial difficulties and potentially insolvency proceedings. However, the prohibition of non-poach agreements contributes to both increasing competitiveness among employees and improving the competitive business environment.

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