HHR Litigation Team Victorious in DOJ No-Poach Case

April 28, 2023 - A Hughes Hubbard team led by Marc Weinstein won a major victory when a Connecticut federal court tossed a Department of Justice (DOJ) criminal antitrust case, entering a judgment of acquittal immediately after the government rested.

As noted by Law360, “U.S. District Judge Victor A. Bolden’s ruling is the first time in decades that criminal antitrust charges have been thrown out under Federal Rule of Criminal Procedure 29 and is the latest blow for U.S. Department of Justice Antitrust Division efforts to prosecute alleged deals to fix wages or restrict recruitment and hiring, having so far failed to win a single jury conviction on those accusations.” The court’s ruling reflects yet another setback to the DOJ Antitrust Division’s efforts to prosecute alleged agreements among competitors to restrict recruitment and hiring.

The antitrust case involved DOJ allegations of an employee “no-poach” agreement among firm client Harpreet Wasan, other executives of outsource engineering firms, and former Pratt & Whitney manager Mahesh Patel. The government accused them of entering into a conspiracy to restrict the hiring and recruiting of engineers and other employees. Pratt & Whitney is a leading manufacturer of military and commercial jet engines, and the outsource engineering firms worked on Pratt & Whitney projects.

The decision puts challenging legal precedent in the way of future DOJ attempts at prosecuting alleged no-poach agreements. Weinstein told The Wall Street Journal that the judgment is “a black eye for the DOJ.” He went on to say, “They are trying to criminalize HR-related issues. You could tell as the evidence was coming in that these charges troubled the court. A crime was not committed here.”

Speaking to Global Competition Review, Weinstein added that “[t]he DOJ opened this trial saying that these people were trapped and that each company was basically deciding pieces on a chessboard and who should work where. And that's just not the case.”

“This case shows that it is not enough for the DOJ to assert that a no-poach agreement is per se violation of the Sherman Act that can and should be pursued through criminal prosecution,” said Philip Giordano, another member of the HHR team. “The DOJ must put such agreements in the context of relevant vertical business relationships and legitimate competitor collaborations in evaluating whether to proceed criminally or civilly, if at all.”

Bloomberg also covered the news, in addition to The Wall Street Journal, Global Competition Review and Law360.

Weinstein’s team included Giordano, Kristin Millay, Kiran Rosenkilde, Raquel Gonoretzky and Nicole Garton.