CMA joins global competition authorities in focusing on compliance in labour markets

14 February 2023

The CMA has issued a publication concerning competition law compliance in labour markets.

The guidance, which was published last week, covers:

  • no-poaching agreements (i.e. agreements where competitors agree not to hire each other’s employees, including where the consent of the other business is required);
  • wage-fixing or benefit-fixing agreements; and
  • information sharing about employees’ contract terms.

The CMA is concerned that agreements or information exchanges of this nature can negatively impact labour markets by reducing wages or benefits packages for employees, reducing their ability to move between companies, and limiting businesses’ growth by restricting their ability to recruit. The CMA hopes that the guidance will remind employers about their compliance obligations and will help to avoid competition law breaches in these areas.

Comments made by Juliette Enser, Senior Director of Cartels at the CMA, suggest the guidance was at least partially triggered by concerns that employees are struggling with the rising cost of living. However, this is a hot topic for global competition authorities at present, and several authorities (most notably the Department of Justice/Federal Trade Commission in the USA) are increasing their enforcement efforts and public outreach on this issue. It will be interesting to see whether the CMA takes any enforcement action in this regard; in the meantime, employers should review the guidance and be careful to ensure compliance in order to avoid the risk of significant penalties.