A Note on Antitrust, Labor, and 'No Cold Call' Agreements in Silicon Valley

Abstract

Firms that provide training to their labor force may risk ex post opportunistic behavior on the part of their workers or of competing firms. Some arguably restrictive firm practices that have been justified by this concern include employment contracts restricting the freedom of workers to seek employment from the firm’s competitors and agreements among competing firms not to solicit or hire certain of each other’s workers – sometimes termed “non-compete” and “no poach” agreements, respectively. This Note considers these two categories of practices in the context of recent public discussions and enforcement actions by the US competition law enforcement agencies.

Keywords: antitrust, labor, training, non-compete clause, no-poach agreement

JEL Classification: J2, J24, K21, L41, L86