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“No-Poaching” Agreements

No-Poaching” Agreements

 

Pursuant to Article 53 of the Federal Economic Competition Law, agreements between competitors to fix or manipulate sale or purchase prices of goods or services, or restrict the supply of such goods or services are deemed absolute monopolistic practices, which are prohibited and strictly penalized.

 

Historically, the antitrust authority has applied Article 53 to agreements related to goods or services offered by economic agents to customers and consumers; however, this prohibition applies to all markets, for example purchase of inputs or retaining of services. As such, there is a current international trend (in particular in the United States) to investigate this type of agreements, when said agreements restrict the competition in the hiring of employees (exchange of information on hiring conditions -salaries, fringe benefits, codes of “conduct,” etc.), therefore, it is very likely that the Federal Economic Competition Commission will adopt the same measures.

 

In view of the above, it is highly advisable for companies to train their human resources staff on economic competition matters and review their hiring policies to ensure the compliance with the economic competition law and avoid potential administrative-law fines, including related criminal penalties.

 

For any additional information on the above, please contact:

 

Amilcar Peredo peredo@basham.com.m

Sara Gutierrez sgutierrez@basham.com.mx

 

Mexico City, April 27, 2018

 

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