Article 4 of the Act № 4054 on the Protection of Competition prohibits “the agreements and concerted practices between undertakings, and decisions and practices of associations of undertakings which have as their object or effect or likely effect the prevention, distortion or restriction of competition directly or indirectly in a particular market for goods or services”.
In the investigations carried out by the Turkish Competition Authority (“TCA”), violations such as price agreements and market divisions are generally brought to the fore within the scope of Article 4. In addition to these violations, agreements concerning human resources have started to be investigated by TCA as in the example of the EU.
The main logic behind these investigations is shaped around the deprivation of higher wages and better conditions for workers. TCA states that in a market where the transfer of employees to different undertakings is prevented, workers will be deprived of higher wages and better conditions. Moreover, TCA stated in one of its decisions called “Container Drivers“ that no-poaching agreements are no different from market or customer sharing agreements.
Although several investigations have been carried out by the TCA in past years on No-Poaching Agreements, the most remarkable investigation was initiated by TCA on April 20, 2021 against 32 (thirthy-two) undertakings, which are mainly operating in digital markets. Finally, on May 09, 2022, another investigation against 7 software undertakings were initiated due to no-poaching agreement. In this regard, It is apparent that the TCA has taken companies operating in the digital market and software fields under its radar. The main reason behind this is that employees in labor markets with high specialization take place as a serious criterion in the competition between undertakings.
Antitrust Guidance for Human Resource Professionals (“Guidance”) defines no-poaching agreements as the agreements between undertakings prohibiting from hiring employees from each other. According to the Guidance, no-poaching agreements are divided into two: i) Naked Agreement and ii) Extension agreement of reasonable cooperation between undertakings.
Naked Agreements are the agreements between undertakings that refuse to solicit or hire that other undertaking’s employees and separate from or not reasonably necessary to a larger legitimate collaboration. Naked agreements are deemed as per se illegal on their own under the antitrust law. Therefore, if a no-poaching agreement is not reasonably necessary of a cooperation between undertakings, it shall be deemed per se illegal according to the Guidance.
TCA also qualifies the naked no-poaching agreements as violation by object and anti-competitive by their very nature. However, legitimate no-poaching agreements made as an extension of a reasonable cooperation shall not be deemed as per se illegal. These agreements can only be seen as a violation by effect on the market.
In the “Container Drivers” decision of TCA, this point was also emphasized by the following statements: “The limitations on the labor market in legitimate collaborations or agreements should be approached with effect-based assessments.”
Looking at the recent investigations, it can be said that no-poaching agreements in labor markets are now one of the main concerns of TCA. In this respect, it is obvious that HR department of the undertakings should pay attention to this issue, considering that naked no-poaching agreements are deemed as per se illegal under Turkish Competition Law, and neglecting this could lead to serious fines.