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Google Ends ‘No Poaching’ Requirement for Former Employees

June 12, 2019, 10:42 AM

Google recently stopped enforcing a contract provision that banned former employees from trying to hire away their ex-colleagues for a year after leaving the company.

The company said in a recent court filing that it’s no longer enforcing its non-solicitation agreements. A Google spokesperson confirmed the decision in a June 10 e-mail to Bloomberg Law. The spokesperson didn’t respond to Bloomberg Law’s questions about how long Google has had a non-solicitation clause in employment contracts.

"[W]e have implemented a policy in which Google waives its right to prohibit former employees from soliciting current employees,” the spokesperson said. Google announced the decision in May, according to the court filing, which came in response to a lawsuit challenging the company’s employment agreements and practices.

The policy change in employment contracts follows a 2015 case in which Google, Adobe Systems Inc., Intel Corp. and other big tech companies agreed to pay $415 million to settle a nationwide class action that alleged antitrust violations for conspiring and agreeing not to poach each others’ employees. That lawsuit followed a Justice Department Antitrust Division investigation that focused on agreements between employers, as opposed to those between employer and employee. The government also filed its own lawsuit, which was settled after the companies agreed not to enter into non-solicitation agreements with other employers for five years.

Google may still face litigation over the ‘no poaching’ provisions, even if it no longer enforces the clauses. The DOJ—which is currently looking into antitrust violations in Silicon Valley—recently laid out its position that most no-poach agreements that aren’t reasonably necessary to business collaboration between employers should be prosecuted. Google workers previously covered by the agreements could pursue litigation under federal or state law alleging that the pacts unlawfully restrained competition or limited their career options.

Under federal law, “agreements between horizontal competitors like Google and Apple that aren’t tied to any legitimate joint venture or collaboration are per se violations,” meaning they’re unlawful in and of themselves, James Tierney, a partner at law firm Orrick, Herrington & Sutcliffe, told Bloomberg Law June 10. Tierney oversaw the antitrust division’s complaint against the Silicon Valley companies in 2015 and helped craft the resulting consent decree and legal interpretations.

“This is between employee and employer—a vertical agreement—and those are judged under the rule of reason, they’re not per se unlawful,” he said. “The long and short is that it’s permitted so long as it’s reasonable and necessary to the employee-employer relationship, and is narrow in scope.”

Tierney noted that non-solicitation provisions are common, especially among high-level managers who could potentially leave for a competitor and hire subordinates from their old job. The 2015 settlement included language explicitly permitting non-solicitation contracts between employees and employers for circumstances like those.

“To be clear, we were not saying these agreements or even Google’s are all lawful, it’s that they’re subject to analysis under a rule of reason—you have to show some harm to competition.”

Google’s court filing came in a case filed in California, which regulates employers much more stringently than the federal government and most other states.

The company has faced a spate of worker action recently, including protests, walkouts, and a pending complaint to the federal labor board alleging unlawful retaliation against employees who participated in those actions.

Poaching Lawsuits on the Rise


Some of the largest businesses in the country have faced high-cost antitrust litigation related to wage-fixing, “non-compete,” and “no poach” agreements in the past several years.

“When companies agree not to hire or recruit one another’s employees, they are agreeing not to compete for those employees’ labor,” the Justice Department’s Antitrust Division says on its website. “Robbing employees of labor market competition deprives them of job opportunities, information, and the ability to use competing offers to negotiate better terms of employment.”

Antitrust law applies the same rules to businesses competing to sell goods and services to employers competing for talent, the DOJ says.

Walt Disney Co. in 2017 agreed to pay $100 million to settle claims that it had “no-poach” agreements with other animation studios in California. At least 14 states recently sued and reached settlements with Arby’s, Carl’s Jr., and other fast food businesses over no-poach agreements between the franchisors and franchisees that often weren’t disclosed to employees.

Those cases also got the attention of the DOJ, which told at least three courts that most no-poach agreements that aren’t reasonably necessary to business collaboration should be found illegal.

Google disclosed its non-solicitation policy change in a lawsuit by employee DeWayne Cassel challenging various parts of its worker confidentiality and other agreements, among other claims.

“Google announced last month its waiver of its contractual right to require that former employees refrain (for a period of 12 months following the end of their employment) from soliciting current Google employees to leave their employment,” attorneys for the company said in the June 7 joint filing.

Cassel’s lawyers said they do “not know how broadly this alleged change was announced” or “if Google has modified its current employment agreements.”

Google also asked the court to strike Cassel’s request for an order that would prevent the company from enforcing its non-solicitiation provision in the future.

The case is Cassel v. Google LLC, et al, Cal. Super. Ct., No. 17-CV-319202, complaint filed 11/15/17.

To contact the reporter on this story: Hassan A. Kanu in Washington at hkanu@bloomberglaw.com

To contact the editors responsible for this story: Simon Nadel at snadel@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com