Competition Act amendment to move wage-fixing and ‘no poaching’ agreements under criminal provisions
Competition Act amendment to move wage-fixing and ‘no poaching’ agreements under criminal provisions
New rules prohibiting wage-fixing and no-poaching agreements kick in Friday in an effort to crack down on companies undermining competition at employees' expense.
The end of June wave of legislative changes rolls on.
Today, an amendment to the Competition Act comes into force that may have significant implications for employers and employees.
Basically, wage-fixing and ‘no compete’ deals between employers will now be on the same criminal level as price-fixing rather than only being under the civil law provisions of the act.
It will be interesting to see how this plays out, but it does send a strong signal.
The penalty for violating the wage-fixing and no-poaching provisions includes imprisonment for up to 14 years, and/or a fine to be set at the discretion of the court.
That's a hefty sentence. You love to see it.
I will buy a bottle of champagne for the first time this gets enforced. Hopefully it isn't vinegar by the time I crack it :p
The pessimist in me says to plant some grapes, but here is hoping!
I don't see prison time actually being handed out much for this. Any big corporation that does this will also have insulated themselves from liability. Best case scenario, they nominate some fall guy and the execs get off scot-free.
Great article. Thanks for posting
This is amazing news!
When I joined my current company I signed a non-compete which doesn't allow me to work for a direct competitor for five years. Are these straight up non-enforcible? Or is the definition of "competitor" very narrow?
The article explains that this only applies to reciprocal agreements between two or more employers.
This means if it’s just your employer asking it if you, the provision wouldn’t apply. However, if the employers in your industry collude to all require similar non-competes, it sounds like that would come under the provision.
Most non-competes are unenforceable for ordinary employees. Essentially if it would deprive you of your livelihood, it’s a no-go. But please check with an employment lawyer.