Competing for talent: what employers need to know

HR and employment practices continue to be a focus for UK and EU competition authorities. 

Following its first finding of infringement for anticompetitive conduct in the labour markets, the CMA has issued further guidance for businesses on this important topic. However, as we explore in this article, some material uncertainties persist.

On 9 September 2025, the UK Competition and Markets Authority (CMA) published its “Competing for Talent” guidance (the Guidance), together with some brief “lessons” from the CMA’s recent decision concerning information exchanges between a number of sports TV production and broadcast companies on freelancer pay. The Guidance is the most substantial statement to date from the CMA on the interface between competition law and labour markets. It expands on the CMA’s very high-level 2023 “advice for employers” – setting out how competition law applies to HR issues, and providing some do’s and don’ts for businesses to follow when recruiting, remunerating and retaining employees.

The publishing of the Guidance comes amid a series of European developments regarding the application of competition law to labour markets. However, while the direction of travel in this growing field of enforcement is becoming clearer, there remain areas of divergence and uncertainty – including an absence of firm red lines regarding certain commonly encountered practices that could impact how firms compete to attract and retain talent.

The CMA Guidance

Unlike the relatively technical “Antitrust in labour markets” policy brief published by the European Commission in May 2024 (the Policy Brief), the Guidance is aimed firmly at businesses; particularly HR professionals and those involved in recruiting and employing individuals. It sets out some practical compliance steps, outlining what businesses can do to avoid breaching competition law when working to recruit and retain workers. 

The Guidance begins with a reminder that – contrary to misconceptions held by some – agreements between employers regarding wages or conditions are not purely an HR issue and do fall within the scope of competition law. Moreover, the CMA cautions business that even companies that do not compete for customers may be competitors for talent in the labour markets.

The Guidance then highlights three forms of cartel conduct in labour markets that must be avoided: (i) no‑poach agreements; (ii) wage-fixing; and (iii) the exchange of commercially sensitive, employment-related information. 

No-poach arrangements

These are arrangements through which businesses agree not to hire or solicit each other’s employees – whether through an outright no‑hire agreement, a “no-cold-calling” agreement (i.e. an agreement not to actively approach another business’s employees), or an agreement to obtain consent before soliciting or hiring another business’s staff. 

Notably, such agreements are distinguished from non‑solicitation clauses in genuine commercial contracts (which the Guidance refers to as including secondment agreements, consultancy agreements and other service contracts). According to the Guidance, such clauses – and potentially even no‑hire clauses – might be permissible where they are necessary to enable the underlying commercial agreement to be carried out, are proportionate to the overall objectives of the agreement, and their coverage, scope and duration are limited to what is reasonably necessary. This will require a careful case by case assessment in each instance to avoid crossing into unlawful no‑poaching territory, as the guidance does not provide any sort of clear safe harbour in this regard.

Wage-fixing

Wage-fixing – where businesses coordinate on pay, rather than competing for talent – is another example of anti-competitive cartel conduct. The Guidance makes clear that:

• coordination on benefits and other terms and conditions of employment, as well as on salaries, will be a breach of competition law. Although not explored in the Guidance, it is therefore arguable that it could include coordination on matters such as the ability of employees to work flexibly and the minimum number of days in the office;
• agreements to limit wage‑increase percentages are also likely to qualify as wage-fixing, without agreeing on specific salary levels or salary caps; and
• as with other forms of competition law infringement, the existence of a formal or informal agreement between firms is not necessary to establish a breach; an alignment of expectations between the parties may suffice. For example, the circulating of recommended pay scales by a trade association will likely expose both the association and its members to liability.

Information exchange and benchmarking

The Guidance notes that whilst information-sharing (including through benchmarking exercises) is commonplace and can often be beneficial, it is important to ensure that it is conducted in a competition law compliant manner. This is because when competitors (including businesses that compete for talent) share competitively sensitive information (CSI) with each other, that can restrict competition and breach competition law.

The key question here is whether the information exchange reduces uncertainty in the market, or could influence the competitive strategy of the business(es) receiving the information – including in relation to the hiring of workers or setting of pay or benefits. The Guidance explains in this regard that:

• information that is already publicly available is “unlikely” to constitute CSI;
• historic information is “less likely” to constitute CSI than current or forward-looking information, although ultimately it is the capacity of the information to reduce strategic uncertainty and/or influence another business’s conduct that is key; and
• where information is collected by a third party and then “appropriately” anonymised and aggregated – i.e. so that the inputs cannot be reverse engineered and the outputs do not provide an insight into each participant’s business strategy – before being shared with participants, competition concerns are “less likely” to arise. The Guidance does not specify how many parties’ data must be aggregated and anonymised in order for such exercises to be unproblematic. However, as a practical example, it indicates that a benchmarking exercise that aggregates compensation data from only three companies that are known to each other is likely to give rise to competition law concerns.

This section of the Guidance is somewhat ambiguous, with the CMA opting not to set out a clear safe harbour within which parties can engage in benchmarking and similar exercises without giving rise to enforcement risk. Obtaining appropriate advice before engaging in such activity is therefore advisable.

Collective bargaining

Finally (and perhaps most significantly), the Guidance addresses collective negotiations between employers and workers regarding pay and working conditions. 

The Guidance applies to “genuine” collective bargaining – where one or more employers or industry bodies on the one side, and one or more workers’ organisations on the other (including those representing workers who may be self-employed), negotiate with a view to determining wages, hours or other terms, or to regulating relations between them; and typically where each side “recognises” the other for labour-relations purposes. Such agreements already benefit from an exception to normal competition law principles at EU level; the Guidance now makes clear that the CMA will not seek to enforce UK competition law against such arrangements. 

The Guidance explains that this policy applies not simply to the discussions between representatives of employers and employees, but will also permit each side to engage in preparatory discussions to agree common goals and negotiation strategies, even if that involves discussions between competitors. However, this does not provide a “blank cheque” for any and all exchanges of CSI. Any “spillover” – where CSI is shared beyond what is required for collective bargaining, or where coordination goes beyond what is necessary – is likely to be considered anticompetitive. As with the other areas covered in the Guidance, it will be important to ensure that competition law advice is sought at an early stage to ensure that appropriate safeguards and practical guidance can be put in place before preparatory discussions commence.

Other developments

As other recent cases demonstrate, these labour market issues are also a hot topic across Europe.

• As discussed in our previous article, in June the Commission fined Delivery Hero and Glovo for participating in illegal no‑poach/no‑hire agreements, alongside a market and information-sharing arrangement. The non-confidential version of the infringement decision was recently published. It confirms the approach set out in the Policy Brief – namely that the Commission views these arrangements as restrictions "by object", which are presumed illegal without the need for analysis of their effects. The Commission rejected arguments that the no-hire clauses were necessary to protect Delivery Hero’s investment and so should benefit from the ancillary restraints doctrine, given the clauses were unlimited in duration, reciprocal, and not uniformly applied to all investors. This strict approach signals that only narrowly tailored restraints that are closely linked to specific transactions may be defensible, and the bar for justifying them as necessary is very high.
• Advocate General Emiliou’s Opinion in Tondela did however adopt a more nuanced approach, when considering no-hire arrangements entered into by certain Portuguese professional football clubs during the COVID-19 pandemic. Whilst acknowledging that no-poach agreements can often be presumed to have an anticompetitive object, AG Emiliou opined that competition authorities must still consider their purpose, scope, and necessity before reaching such a conclusion – especially in exceptional circumstances (such as safeguarding the integrity of sports competitions during a pandemic). The Opinion is non-binding and it remains to be seen whether it will be followed. The Court of Justice’s ruling is, therefore, eagerly anticipated, given its potential to provide further clarity on the treatment of no-poach agreements under EU law.
• Finally, it should be noted that the French Autorité de la concurrence (AdC) recently fined a number of consultancy companies in the tech/engineering sector for entering into broad “gentlemen’s agreements” not to solicit or hire each other’s staff. At the same time, however, the AdC demonstrated some flexibility in concluding that a number of project-specific no-hire/solicit clauses in mandate agreements did not pursue an anticompetitive object, as they were limited in scope and duration, and were necessary to prevent disruption to ongoing projects. 

Implications for business

Labour market collusion clearly continues to be an area of focus for the UK and EU’s competition authorities. Whilst the Guidance provides a helpful indication of the sorts of arrangements the CMA will prioritise enforcing against in this regard, the precise boundaries of what constitutes lawful conduct remain unsettled. 

Against that background, it is important to ensure that HR and recruitment teams have access to appropriate and timely competition advice. Moreover, as well as avoiding improperly-designed benchmarking exercises and informal no-poach arrangements, businesses should ensure that any restrictions they agree to on soliciting or hiring staff are tightly scoped, time-limited, linked to a specific transaction, and entered into only when strictly necessary. This is likely to require broader awareness of the risks among non-HR staff.

Trainee solicitor Mihaela Lekova contributed to this article.