U.S. Department of Justice, Antitrust Division, Launches Investigation into Certain Recruiting and Hiring Practices of Technology Companies

June 15, 2009

The U.S. Department of Justice, Antitrust Division recently has launched an investigation into whether certain recruiting and hiring practices of technology companies violate the antitrust laws.  The investigation is the latest example of the Obama Administration’s aggressive antitrust enforcement policy and especially close scrutiny of the technology industries.

Although the Antitrust Division has not officially commented on the investigation, the press has reported that the inquiry, which has been described as industry-wide, concerns whether technology companies have engaged in anticompetitive behavior by agreeing not to actively recruit each other’s employees.  Such agreements, if actually proven, could have the possible effect of restraining trade in the market for skilled employees and suppressing wages.  According to press reports, certain large technology companies already have been served with formal requests for documents and information.

This latest investigation comes on the heels of another Antitrust Division inquiry into whether a proposed class action settlement between Google Inc. and publishers over Google’s online book library violates antitrust laws.  In addition, the Federal Trade Commission is investigating whether overlap between the boards of directors of Google and Apple Inc. amounts to an antitrust violation.

All of these recent investigations confirm that the Obama Administration, as reflected in its early pronouncements, is pursuing an aggressive antitrust enforcement policy, particularly with respect to the technology industries.  Indeed, in her first major public address, Christine A. Varney, the Assistant Attorney General in charge of the Antitrust Division, said that the Antitrust Division would work to regain the mantle of “leader in its enforcement efforts in the technology industries.”  Ms. Varney also said that the Antitrust Division planned to “devote attention to understanding the unique competition-related issues” posed by the high-tech and Internet-based markets.[1]  We will continue to keep our clients apprised about these investigations and other important enforcement initiatives by the Antitrust Division.

Gibson, Dunn & Crutcher has been representing clients in antitrust matters for much of the last century.  Today, Gibson Dunn is recognized as one of the leading antitrust firms in the United States and worldwide.  Among other accolades, Gibson Dunn has been ranked as one of five top-tier firms in the United States and recognized as a leading global firm for Competition/Antitrust law in Chambers Global’s 2009 Guide to the World’s Leading Lawyers.  Gibson Dunn also has been ranked among the top ten firms in 2008 Global Competition Review’s GCR 100: The World’s Leading Competition Law Practices; named as one of the three “leading” firms for antitrust work in the United States and “recommended” in the EU in Practical Law Company’s Which Lawyer: Competition 2007/2008; and, ranked as one of the five “Tier 1” firms for antitrust in the 2009 edition of US Legal 500.

Gibson Dunn’s Antitrust Practice Group serves clients in a broad array of industries throughout the world in virtually every significant area of antitrust and trade regulation law, including (1) cartel investigations and government civil investigations in Europe, the U.S., and elsewhere; (2) class action treble damage litigation; (3) private antitrust litigation; (4) government review of mergers and acquisitions; and (5) trade regulation matters that involve unfair competition, consumer protection, and State aid issues.  Gibson Dunn attorneys regularly represent clients in investigations conducted by the Antitrust Division and the Federal Trade Commission.  They also regularly conduct internal investigations, and evaluate, design, and enhance antitrust compliance programs for companies across the country and internationally.

[1]   The speech, entitled “Vigorous Antitrust Enforcement in this Challenging Era,” was delivered on May 11, 2009 to the Center for American Progress.  The text of Ms. Varney’s remarks is available at http://www.usdoj.gov/atr/public/speeches/245711.htm.

Gibson, Dunn & Crutcher LLP lawyers are available to assist in addressing any questions you may have regarding the investigations described in this Client Alert or about the various services provided by its Antitrust Practice Group, including conducting internal investigations as well as evaluating and enhancing your company’s antitrust compliance programs.  Please contact the Gibson Dunn attorney with whom you work, or any of the following:

Antitrust and Trade Regulation Practice Group:

New York
John A. Herfort (212-351-3832, [email protected])
Mark Kirsch (212- 351-2662, [email protected])
Stacey Anne Mahoney (212-351-2655, [email protected])
Peter Sullivan (212-351-5370, [email protected])
James A. Walden (212-351-2300, [email protected])
Lawrence J. Zweifach (212-351-2625, [email protected])
Alexander H. Southwell (212-351-3981, [email protected])

Washington, D.C.
D. Jarrett Arp (202-955-8678, [email protected])
Michael L. Denger (202-955-8526, [email protected])
Joseph Kattan P.C. (202-955-8239, [email protected])
Joshua Lipton (202-955-8226, [email protected])

Los Angeles
Robert E. Cooper (213-229-7179, [email protected])
Daniel G. Swanson (213-229-7430, [email protected])

San Francisco
Joel S. Sanders (415-393-8268, [email protected])
Gary R. Spratling
(415-393-8222, [email protected])

M. Sean Royall (214-698-3256, [email protected])

Labor and Employment Practice Group:

Eugene Scalia – Washington, D.C. (202-955-8206, [email protected])
William D. Claster – Orange County (949-451-3804, [email protected])

© 2009 Gibson, Dunn & Crutcher LLP

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