Businesses are constantly challenged by the ever-evolving landscape of labor and employment law, with new legislation and judicial developments occurring almost daily fueling a seemingly never-ending stream of litigation. For companies operating in multiple states, complying with this patchwork of federal, state, and local laws and developments can be daunting. Knowing these issues are a top concern for management and in-house counsel, Morrison Foerster keeps pace with this rapidly evolving landscape. MoFo ELC equips our clients with the most up-to-date and relevant information on employment and labor law issues covering key judicial, litigation and legislative developments, their implications for employers, and strategies to ensure compliance and avoid lawsuits.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Andrew co-chairs the firm’s Global Employment and Labor Group. He represents companies on a broad range of labor and employment litigation and counseling matters, successfully defending clients in number complex matters before federal and state courts and administrative agencies. A primary focus of his practice involves helping companies navigate the unique employment issues that arise when doing business with the federal government, such as:<ul><li>OFCCP compliance</li><li>Creating and implementing affirmative action plans</li><li>Defending OFCCP audits and onsite investigations</li><li>Conducting mock pay equity audits</li><li>Drafting and developing business ethics policies and programs</li><li>Complying with the Service Contract Act, E-Verify, and the Drug Free Workplace Act</li></ul>He is also well-versed in defending clients against claims alleging trade secret misappropriation, breach of post-employment restrictions, wage-and-hour violations, discrimination, and retaliation.Andrew routinely develops practical, proactive strategies to help employers minimize risk on various human resource matters. Andrew regularly advises clients on:<ul><li>EEO and diversity</li><li>Wage-and-hour</li><li>High-stakes employee terminations</li><li>Executive disputes</li><li>Reductions in force</li><li>Leaves of absence</li><li>Accommodations</li><li>Pay equity</li><li>Employee selection processes</li><li>Employment testing</li><li>Contingent workers </li><li>Policy development and application</li></ul>In addition, Andrew advises on a wide range of employment transactional matters, such as drafting and negotiating executive employment agreements and separations, overseeing internal investigations and audits of employment issues, and conducting employment diligence on mergers, acquisitions, and other corporate transactions.He has significant experience advising technology and other companies on protecting against the loss of trade secrets, proprietary information, and current and prospective clients. Andrew also represents employers in matters involving union avoidance, negotiating and drafting collective bargaining agreements, handling union grievances, and avoiding and defending unfair labor practice charges.<h4>Federal Contractor Experience</h4><ul><li>Defended numerous OFCCP audits, including closing audits with a finding of no violations against a major accounting firm, a language learning software provider, and a technology consulting company</li><li>Obtained complete dismissal of a significant OFCCP complaint against a large aerospace and space transport company</li><li>Performed mock SCA audits for various contractors</li><li>Led labor and employment diligence for $1 billion acquisition of international security firm</li><li>Developed and overhauled numerous affirmative action plans and EEO training programs</li><li>Analyzed subcontractor status for numerous companies to determine OFCCP coverage, including for a large semiconductor manufacturer</li><li>Conducted E-Verify and I-9 audit for a national dispute consulting contractor</li><li>Performed “single entity” analysis for one of the largest mutual life insurance companies</li><li>Conducted pay equity audits for contractors, including for a software and consulting company</li><li>Obtained DOL approval under the SCA for self-funded fringe benefit program of an aviation and space contractor</li><li>Advised a multinational package delivery company on establishing program to conduct denied party screening under lists maintained by OFAC and BIS while minimizing risk of discrimination claims and compliance with background check laws</li><li>Advised a global coffee and coffeehouse chain on establishing hiring processes to avoid discrimination claims while complying with ITAR/EAR</li><li>Developed business ethics policies and programs for a large pharmaceutical manufacturer</li></ul><h4>Other Representative Experience</h4><ul><li>Defended education association against claims by former employers of two executives alleging breach of restrictive covenants and theft of trade secrets and confidential information</li><li>Obtained preliminary injunction enforcing a noncompetition agreement and other restrictive covenants against a former senior sales executive of a technology firm</li><li>Led internal investigation of sexual harassment claims against COO of a public real estate firm</li><li>Advised a global food manufacturer in avoiding litigation while terminating employee threatening whistleblower claims based on employer’s confidential information</li><li>Defended former senior executives of a global manufacturer of performance fabrics against allegations of misappropriation of trade secrets and breach of noncompetition agreements</li><li>Advised an entrepreneur in creating startup while minimizing risk of his former employer pursuing enforcement of restrictive covenants </li><li>Assisted a property management firm in navigating internal investigation of whistleblower claims related to alleged fraud, ethics violations, and sexual harassment by senior executive</li><li>Won motion for reconsideration convincing court to grant summary judgment in gender discrimination and retaliation case against a large DC employer </li><li>Obtained terminating sanctions and attorneys’ fees and costs for discovery violations in a discrimination suit against a large utility provider </li><li>Obtained favorable arbitration decision for a software company in claims by former executive alleging breach of his employment agreement</li><li>Advised a company board in navigating termination of CEO and successfully defended CEO’s breach of contract and wage claims</li><li>Defended numerous EEOC charges, including against a national event planner, a multinational professional services company, and an operator of research and development centers for the government</li><li>Defended and settled over 30 unfair labor practice charges against a national call center operator</li><li>Negotiated new collective bargaining agreements with four separate unions in bankruptcy of an international maritime shipping company</li><li>Awarded pro bono achievement award for defending a non profit in litigation and several administrative audits before the EEOC and state agencies related to a former employee’s whistleblower and discrimination claims, including defending multiple onsite investigations</li><li>Oversaw validation of pre-employment tests for a national food service distributor</li></ul>Prior to joining MoFo, Andrew was a human resources manager for an Inc. 500 company, ranked as one of the fastest-growing private companies in the United States.Andrew is a member of the steering committee and actively involved in the Washington Metro Industry Liaison Group. He is also a member of the firm’s global Environmental, Social, and Governance (ESG) steering committee.<h4>Rankings</h4><ul><li>Recommended for Government Contracts – Legal 500 US 2019 </li></ul>

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Co-Chair, Global Employment and Labor Practice

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Andrew Turnbull represents companies on a broad range of labor and employment litigation and counseling matters. He has successfully defended clients in complex employment litigation before federal and state courts and administrative agencies. A primary focus of his practice involves helping companies navigate the unique employment issues that arise when doing business with the federal government, including advising on all aspects of OFCCP compliance, creating and implementing affirmative action plans, defending OFCCP audits and onsite investigations, conducting mock pay equity audits, drafting and developing business ethics policies and programs, and complying with the Service Contract Act, E-Verify, and the Drug Free Workplace Act.

Andrew Turnbull

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MoFo ELC equips our clients with the most up-to-date and relevant information on employment and labor law issues, covering key judicial, litigation, and legislative developments, their implications for employers, and strategies to ensure compliance and avoid lawsuits. To learn more about our capabilities, please visit the <a href="https://www.mofo.com/capabilities/employment-labor" target="_blank">Employment + Labor</a> practice page and read about our <a href="https://www.mofo.com/people?practices=Employment%20%2B%20Labor" target="_blank">Team</a>.

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The U.S. Department of Justice’s (“DOJ’s”) ongoing efforts against no-poach agreements suffered their latest setback on April 28, 2023, following the Connecticut federal court’s ruling in U.S.A. v. Mahesh Patel, 

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No-Poach Case Alert: DOJ’s No-Poach Strategy Dealt Another Blow As Court Tosses Case Before It Reaches Jury | Employment Law Commentary

No-Poach Case Alert: DOJ’s No-Poach Strategy Dealt Another Blow As Court Tosses Case Before It Reaches Jury | MoFo ELC | Latest Employment Law Developments and Commentary

Eric Akira Tate

Cooper J. Spinelli

The U.S. Department of Justice’s (“DOJ’s”) ongoing efforts against no-poach agreements suffered their latest setback on April 28, 2023, following the Connecticut federal court’s ruling in U.S.A. v. Mahesh Patel, acquitting all six defendants of criminal liability for allegedly entering into a horizontal no-hire agreement. Though it is tied to the particular facts of the case, the ruling is yet another sign that the DOJ continues to face an uphill battle to impose criminal liability on what typically has been a civil issue.Overview of DOJ No-Poach EnforcementThe DOJ has the power to enforce restraints of trade that violate the Sherman Act. Criminal liability under the Sherman Act can be considerable—companies face criminal fines of $100 million or more, and executives face up to 10 years in prison.Criminally, the DOJ typically has gone after only per se restraints of trade. The per se rule historically has been applied to restraints such as price-fixing, bid-rigging, and market allocations “that would always or almost always tend to restrict competition and decrease output.”<a href="#_ftn1" target="_self" id="_ftnref1">[1]</a> These restraints are considered per se unreasonable and therefore “do not require elaborate inquiry as to the precise harm they have caused or the business excuse for their use.”<a href="#_ftn2" target="_self" id="_ftnref2">[2]</a> No-poach agreements, however, had not traditionally been a DOJ target for criminal enforcement.<a href="#_ftn3" target="_self" id="_ftnref3">[3]</a>That began to change around 2010, when the DOJ started filing multiple civil enforcement actions against Silicon Valley tech companies, arguing no-poach agreements between them were per se unlawful (the “High Tech cases”). After a couple of years, the parties settled and entered stipulated final judgments that prohibited agreements to refrain from soliciting, recruiting, or otherwise competing for employees. But these judgments did not prohibit an agreement with a “no direct solicitation provision” if it was not a “naked” agreement, i.e., if the agreement was ancillary to a specific legitimate transaction such as existing or future employment or severance agreements, M&A deals, contracts with consultants, settlement agreements, and contracts with resellers.<a href="#_ftn4" target="_self" id="_ftnref4">[4]</a>The DOJ brought its first criminal actions against no-poach agreements in 2021. Other than one plea deal and one case that remains pending, defendants have obtained acquittals against the DOJ in each case to date. Patel was the latest.<table><colgroup data-width='624'><col style="width:35.256410256410255%"><col style="width:30.448717948717945%"><col style="width:34.294871794871796%"></colgroup><tbody><tr><td>Case</td><td>Charges</td><td>Outcome</td></tr><tr><td>U.S. v. DaVita, No. 1:21-cr-00229 (D. Colo. Jul. 14, 2021)</td><td>Three competitors—each run by DaVita alumni—agreed to (1) avoid recruiting DaVita’s executives and (2) tell DaVita employees applying to work for any of the three competitors that they had to alert DaVita they were considering leaving before they could receive an offer</td><td>Acquittal: Not guilty jury verdict</td></tr><tr><td>United States v. Manahe, No.  2:22-cr-00013-JAW (D. Me. Mar. 22, 2023)</td><td>Two-month conspiracy between April and May 2020 not to hire each other’s caretakers and to fix caretaker wages</td><td>Acquittal: Not guilty jury verdict</td></tr><tr><td>U.S.A. v. Mahesh Patel, No. 3:21-CR-220 (VAB), (D. Conn. Apr. 28, 2023)</td><td>Conspiracy in which they agreed not to poach competitors’ workers for more than a decade</td><td>Acquittal: Court granted judgment of acquittal before case went to jury</td></tr><tr><td>U.S. v. Hee, No. 2:21-cr-00098 (D. Nev. Oct. 27, 2022)</td><td>No-hire agreement and agreement not to raise wages for school nurses in Clark County, Nevada</td><td>Plea agreement: Staffing company defendant, VDA OC LLC, agreed to pay $134,000 in criminal fines and restitution as a result of the plea. Individual defendant Mr. Hee agreed to 180 hours of community service and pretrial diversion</td></tr><tr><td>United States v. Surgical Care Affiliates LLC, No. 3:21-cr-00011 (N.D. Tex. Nov. 11, 2022)</td><td>Agreements with DaVita and another company not to solicit each other’s executives</td><td>Pending: Trial originally scheduled for January 2023 has been continued. Defendant’s motion to dismiss is pendingDefendant just filed a Notice of Additional Authority on May 9, 2023, arguing that the Patel decision strongly supports its motion to dismiss</td></tr><tr><td>United States v. Jindal, No. 20-cv-0358 (E.D. Tex. Apr. 14, 2022)</td><td>Conspiracy to fix wages of physical therapist assistants in Dallas area</td><td>Acquittal: Not guilty jury verdict</td></tr></tbody></table>U.S.A. v. Mahesh PatelBackground. Patel was one of the DOJ’s higher-profile cases. In December 2021, the DOJ indicted six executives and managers from Raytheon and other aerospace firms, charging them with a conspiracy in which they agreed not to poach competitors’ workers for more than a decade. The court denied defendants’ motion to dismiss, and the case went to trial. Once the government rested its case-in-chief, defendants moved for a judgment of acquittal, arguing that the government’s evidence “does not permit a reasonable juror to find that Defendants entered into the charged market allocation agreement.” The court agreed.Holding. “[N]ot all no poach agreements are market allocations subject to per se treatment,” the court held, “and therefore, determining whether a no poach agreement is a market allocation is highly fact specific.” Based on the facts in Patel, the court found that, as a matter of law, the agreement at issue did not involve a market allocation under the per se rule because the “alleged agreement itself had so many exceptions that it could not be said to meaningfully allocate the labor market of engineers” between the firms.<a href="#_ftn5" target="_self" id="_ftnref5">[5]</a>The alleged agreement allowed, for instance, hiring between two of the defendants on a case‑by‑case basis with the other side’s consent. The restrictions on hiring also apparently shifted “throughout the course of the conspiracy.” Evidence showed that, at some point, certain restrictions were for just three to six months, whereas at other times defendants were told they could hire other defendants’ employees “when [it] really needed them.”While the court acknowledged that there were emails “suggesting a blanket agreement not to hire,” that apparently was not borne out in practice. “Hiring among the relevant companies was commonplace,” the court found, “throughout the alleged agreement.” The court identified only one purported year-long hiring freeze. And even then, there were still some limited exceptions. The court therefore held that, while the agreement may have constrained mobility to some degree, it did not “allocate the market” “to any meaningful extent.” In reaching this holding, the court denied it was imposing any new requirements for per se liability and suggested that, if anyone may be trying to make new law, it was the government:If anything, the government has tried to expand the common and accepted definition of market allocation in a way not clearly used before.<a href="#_ftn6" target="_self" id="_ftnref6">[6]</a>Practical TakeawaysDespite defendants’ clear victory, the court’s ruling does not mean that naked no-poach agreements are now exempt from criminal liability or the per se rule. The per se analysis is highly fact-specific, as was the court’s ruling. While it imposed some restraints on employee mobility, the agreement in Patel did not result in a blanket hiring freeze. The court instead found that hiring among the companies was “commonplace.”Even after Patel, this continues to be a largely unsettled area of the law. The ruling may make it harder for the DOJ to prevail in criminal prosecutions against no-poach agreements. But regardless, employers should continue to keep in mind that, even if criminal liability or prosecution is avoided, there can still be a risk of civil liability depending on the nature of the agreement. See, e.g., High-Tech cases. Courts and juries may be less reluctant, for instance, to find companies civilly as opposed to criminally liable. As the Patel court noted, courts “are obligated to construe criminal statutes narrowly so that Congress will not unintentionally turn ordinary citizens into criminals.”While Patel is yet another blow to the DOJ’s efforts, it is not clear whether the DOJ will continue to bring criminal cases against no-poach agreements or back off in light of its latest defeat.Whatever happens, employers should continue to consult with counsel before entering into agreements with restrictive covenants such as no-hires.<a href="#_ftnref1" target="_self" id="_ftn1">[1]</a> United States of America v. Mahesh Patel, et al., No. 3:21-CR-220 (VAB), 2023 WL 3143911, at *3 (D. Conn. Apr. 28, 2023).<a href="#_ftnref2" target="_self" id="_ftn2">[2]</a> Id.<a href="#_ftnref3" target="_self" id="_ftn3">[3]</a> A MoForward Warning Comes True: No Poach Enforcement Hits the Defense Industry.<a href="#_ftnref4" target="_self" id="_ftn4">[4]</a> <a href="https://www.justice.gov/atr/case-document/final-judgment-0" target="_self">U.S. v. Adobe Systems, Inc., et al.</a><a href="#_ftnref5" target="_self" id="_ftn5">[5]</a>United States of America v. Mahes Patel, et al., No. 3:21-CR-220 (VAB), 2023 WL 3143911, at *9 (D. Conn. Apr. 28, 2023).<a href="#_ftnref6" target="_self" id="_ftn6">[6]</a> Id. at n.7.

No-Poach Case Alert: DOJ’s No-Poach Strategy Dealt Another Blow As Court Tosses Case Before It Reaches Jury

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