During my time in the Air National Guard I once talked to a government contractor from the East Coast who told me he considered moving part of his operations to my hometown of Wichita, where there is a decent amount of DoD work. While I thought the reason might have been the relatively low cost of living or better yet, the quality of local restaurants here, I was surprised when he explained it to me in one simple word: poaching. He detailed multiple instances where he hired a talented employee, sponsored their security clearance, sent them to specialized training and possibly relocated them, only to see them leave for a competitor two doors down within a year or two. This was particularly true in the fields of intelligence and cybersecurity.
This employer was tired of seeing talent he had essentially raised walk out the door to another opportunity. Even though they had signed non-disclosure and non-compete clauses, it did not keep employees from moving on for more money, better benefits, or clearer tracks for promotion. The instances of someone staying at the same employer for 40 years, as my Dad did at Boeing, are rare. Information is disseminated about job openings from multiple sources accessible to anyone, recruiters are more aggressive, and for good or bad, people are different. As you can imagine, the results are both confounding and expensive for government contractors.
How to Prevent Employer Poaching? Anti-Poaching Agreements
Several years ago, in attempt to keep employees without moving locations, tech companies and government contractors started making deals with each other dubbed anti-poaching agreements. These agreements raised the ire of the Department of Justice (DoJ) who has pursued antitrust actions against companies who have been found to enter into wage fixing, no solicit, or no poach agreements that are not part of a collaboration between the two companies. The most recent example of this aggressive prosecution has occurred in United States vs. Patel filed last month in which several executives of notable aircraft companies were alleged to have carried out no poach agreements with each other. See United States v. Patel, et al., No. 3:21- cr-00220-VAB, ECF No. 20 (D. Conn. Dec. 16, 2021) (the “Indictment”).
Because of this criminal case, several of the parties who were classified by the DoJ as victims filed a class action suit against the aforementioned executives and the companies they work for. Both of the named plaintiffs in the lawsuit are engineers in the aerospace industry. The principal corporate defendant, Pratt & Whitney, had outsourced work projects to various other suppliers, who were also named in the lawsuit. The plaintiffs allege that in order to maximize their profits and not drive up the costs of the project, Pratt & Whitney conspired with the suppliers, who also gained the benefit of continuity of employees, which in turn resulted in reduced costs for their organization. Agency law and liability can be tricky to navigate at times, but the gist of the plaintiffs allegations seem to be that while not expressly authorized, the corporate defendants knew of the anti-poaching conduct by executives and did nothing to stop them.
In previous years civil penalties have been issued against employers for anti-poaching cases, but 2021 brought DoJ’s first criminal no-poach charges. With more scrutiny into anti-poaching and the competition for high-level STEM talent in government contracting only increasing, the DoJ’s actions are worth following. What may seem like a friendly agreement among competitors can be a criminal issue.
