No-poach agreements are arrangements between two or more employers not to hire each other’s employees. These may take the form of ‘no-hire agreements’, which prohibit both active or passive hiring of employees from other parties, or ‘non-solicit agreements’, when the parties agree not to actively approach each other’s employees.[1] Employees are typically not aware of such agreements and therefore have no opportunity to seek compensation for these practices.[2]
Recently such agreements have come under increasing scrutiny under EU competition law. While no-poach agreements have been recognized as a breach of competition law already before[3], the issue has gained attention and is being discussed in the European Commission and on a national level as well.[4] In May 2024 the European Commission issued a Competition policy brief on Antitrust in Labor Markets[5]. The Commission included similar warnings in the Guidelines on the applicability of Article 101 (Horizontal Guidelines)[6] and the Guidelines on collective agreements by solo self-employed people.[7] Moreover, on 2 June 2025, the Commission adopted its first decision imposing fines on two food delivery companies Delivery Hero and Glovo for engaging in no-poach agreements, exchanging commercially sensitive information and allocating geographic markets.[8] The Delivery Hero and Glovo decision confirms the Commission’s approach to treating no-poach and wage-fixing agreements as by-object restrictions of competition.
No-poach and wage fixing agreements
No-poach and wage-fixing agreements are generally regarded as restrictions of competition by object on the relevant hiring market under Article 101 (1) TFEU or the national equivalent.
No-poach agreements have detrimental effects, like reducing labor market dynamism with resulting negative effects on employee compensation, firm productivity, and innovation. Such agreements reduce wages, and the companies have less incentive to raise wages. This also prevents efficient allocation of productive employees to productive firms, therefore resulting in overall declining productivity.[9] This shows that antitrust is not only about direct harm to consumers, but can extend to other matters that affect competition and eventually consumer welfare.
The Commission considers that no-poach agreements will be compatible with EU competition law only in limited circumstances, however they rarely satisfy the conditions necessary to be treated as ancillary restraints and they are also unlikely to fulfil the criteria for exemption under Article 101(3) TFEU.[10] No-poach agreements may be permissible if they are directly connected to, proportional objectively necessary for the implementation of a legitimate, competition-neutral main transaction, for example a merger. Such so-called ancillary restraints fall outside the scope of Article 101(1) TFEU and are not prohibited.[11]
It must be noted that evaluating if an agreement qualifies as an ancillary restraint and is allowed is not always an easy task, as parties must demonstrate the satisfaction of the three criteria to avoid the full scrutiny of Article 101 TFEU. This burden is particularly high because proving the necessity and proportionality of a restraint in a specific context often requires showing that the transaction could not reasonably be achieved by less restrictive means.
Companies may argue that no-hire arrangements serve legitimate purposes, for example, protecting substantial investments in employee training or preventing the leakage of trade secrets when staff move to competitors.[12] However, EU regulators generally dismiss these justifications.
Considering the Commission’s stance in the guiding documents and now also in case-law, national competition authorities in Europe now view these practices as serious antitrust infringements, recognizing that they harm workers’ opportunities and distort the allocation of an essential resource (labor) in the economy.
Competition in labor markets in the Baltics
The labor markets are often national, regional or local, therefore the involvement of national competition authorities is of high importance.[13]
The competition council in Lithuania has adopted a decision on wage-fixing for basketball players, which is now pending a request for a preliminary ruling at the ECJ.[14] This shows the competition authorities stance and approach to such agreements as by-object agreements that harm competition. However, the other two Baltic countries have yet to become more active in this area.
While the Estonian competition authority has yet to voice its views on the matter, the Latvian competition authority has issued a guidance on competition in labor markets. It states that the Latvian Competition law mirrors the EU’s stringent stance on no-poach agreements. Section 11 of the Latvian Competition Law, which implements Article 101 TFEU at the national level, expressly prohibits agreements between market participants that have the object or effect of restricting competition in Latvia. This includes agreements fixing prices, including wages, or allocating markets, including labor market allocation.[15]
The guidance clarifies that collusion in hiring or employment conditions is a serious violation of the law – such conduct is considered a restriction of competition by object, because it limits employees’ mobility, depresses wages, and deprives firms of the ability to compete for skilled labor.[16] While, to date, there have been no infringement decisions in Latvia for no-poaching, the Competition councils guidance signals that it is ready to enforce against any employer cartels in labor markets, in line with EU enforcement trends.
Conclusion
From a regulatory perspective, no-poach agreements are now clearly established as antitrust violations within the EU. Article 101 TFEU provides the legal basis to review these pacts as by-object restrictions, and recent Commission guidance and decisions illustrate a robust approach to keeping labor markets competitive.[17]
Companies operating in Europe should ensure that any discussions or arrangements with rivals do not stray into employment matters. Both the European Commission and national authorities have made it clear that collusion not to hire or to fix wages is illegal and will be scrutinized as any other cartel.
No-poach agreements are on the antitrust radar, and companies should be as cautious when discussing these topics with competitors as they should be with pricing and market strategies. Enforcement is evolving in this area, and companies should turn to their legal advisors to evaluate their agreements to see if they do not breach Article 101 TFEU or the national equivalent.
Author: Beatrise Rihtere
Walless (Latvia)
[1] European Commission, Competition policy brief, Antitrust in Labour Markets, Issue 2, May 2024. Available: https://competition-policy.ec.europa.eu/document/download/adb27d8b-3dd8-4202-958d-198cf0740ce3_en
[2] Oxera, How do non-poaching agreements distort competition? , 28 June, 2019. Available: https://www.oxera.com/insights/agenda/articles/how-do-non-poaching-agreements-distort-competition/
[3] See, e.g., OECD (2019), ‘Competition Policy for Labour Markets – Note by Herbert Hovenkamp’, Roundtable on Competition Issues in Labour Markets. Available: https://one.oecd.org/document/DAF/COMP/WD(2019)67/en/pdf
[4] See, e.g., Joint Nordic report 2024, Competition and labour markets. Available: https://www.konkurrensverket.se/globalassets/dokument/informationsmaterial/rapporter-och-broschyrer/nordiska-rapporter/nordic-report_2024_competition-and-labour-markets.pdf
[5] Competition policy brief, Antitrust in Labour Markets, (n1).
[6] Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (“Horizontal Guidelines”), OJ C 259, 21.7.2023, pp. 1-125, paragraph 279, available: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52023XC0721(01) Commission classifies wage-fixing and no-poach collusion as forms of “buyer cartels” – agreements between buyers of labor (employers) to coordinate purchase prices (wages) or to share sources of supply (workers)
[7] Guidelines on the application of Union competition law to collective agreements regarding the working conditions of solo self-employed persons, OJ C 374, 30.9.2022, pp. 2-13, paragraph 17, example 2, available: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52022XC0930%2802%29
[8] European Commissions 2 June 2025 decision AT.40795, Food delivery services. Available: https://ec.europa.eu/competition/antitrust/cases1/202530/AT_40795_1262.pdf
[9] M. Mustafa Polat, May 7, 2024, The Assessment of Labor Market Collusion: EC Policy Brief on Antitrust Issues in Labour Markets, Kluwer Competition Law Blog. Available: https://legalblogs.wolterskluwer.com/competition-blog/the-assessment-of-labor-market-collusion-ec-policy-brief-on-antitrust-issues-in-labour-markets/?utm_source=chatgpt.com
[10] Competition policy brief, Antitrust in Labour Markets, (n1).
[11] Guidelines on the application of Article 101(3) TFEU (formerly Article 81(3) TEC), section 2.2.3., available: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52004XC0427%2807%29
[12] Competition policy brief, Antitrust in Labour Markets, (n1).
[13] Ibid.
[14] Case C‑324/25, Lietuvos krepšinio lyga and Others (Ref. for preliminary ruling to the Court of Justice of the European Union), available: https://curia.europa.eu/juris/showPdf.jsf;jsessionid=9FAAEA87F3CC15F209D317EB549CADE9?text=&docid=302248&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=418391
[15] Competition Council of Latvia, Employee poaching and competition law. Available: https://www.kp.gov.lv/en/article/employee-poaching-and-competition-law
[16] Ibid.
[17] Competition policy brief, Antitrust in Labour Markets, (n1).