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June 2012
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Antitrust non-compliance serious issue


I usually write this column with the owners and general managers of small businesses in mind. I started Capstone HR five years ago to assist these folks with the people side of their business.

This month, however, I need to write a message mainly to the mid-size firm that probably has a small HR staff.

The Department of Justice and the Federal Trade Commission announced in December that they are increasing their efforts to criminally prosecute employers AND individuals for antitrust violations if they set up any kind wage-fixing and/or no-poaching agreements with organizations that would be considered competitors.

Years ago, I used to joke with my fellow HR managers around the Purchase area that if they stole an employee from my plant, I got to also give them one of my choosing.

All joking aside, things are now different. If vice presidents from two different banks talk during a chamber breakfast about what they pay entry-level tellers and decide to keep it at a certain wage, they would not only be getting their employer in trouble with the feds, but would also face personal felony charges (think jail time, here).

And if they have a policy saying that they do not hire from the competition, they are just waving a flag and asking for trouble.

This new ruling was issued under the name Antitrust Guidance for Human Resource Professionals, so HR staff should especially take notice.

The guidelines specified how wage and benefit surveys must be conducted to remain legal. You can ask the Detroit area hospitals how not to do it, since they recently had to pay over $90 million to settle a class action lawsuit about restricting compensation levels.

Information exchange can be lawful if three things are included.

First, a neutral third-party needs to conduct the exchange, such as the Paducah-based Four Rivers SHRM chapter. An auto parts store manager making a few phone calls to other auto store managers is problematic.

Second, the information needs to be past actual data and not info such as "what are we going to pay next year?"

Lastly, the data has to be aggregated with enough participants to protect the identity of the sources and prevent competitors from linking particular information to a specific source.

While the idea of antitrust in wages and no-poaching has long been out there, this new announcement of criminal proceedings takes it to a whole new level. Antitrust training used to be just for sales people on what not to say to competitive sales people when they meet at a trade show.

Now, you need to add it to your compliance and training programs so that all employees are aware of what they can, and more importantly cannot, say and do.

Randy Fox, SHRM-SCP, SPHR, is founder and senior partner of Capstone HR Services, Inc.

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