Hiring in the hot seat – the CMA publishes new guidance on labour markets

How can competition law become an HR issue?

Competition regulators globally are increasingly interested in behaviour that may restrict competition in labour markets.  In the UK, the Competition Act 1998 prohibits a wide range of potentially anti-competitive conduct between competitors, including both formal and informal agreements and practices, such as fixing prices, sharing markets, or restricting innovation. The Competing for Talent guidance (the Guidance) reflects areas of concern that have been identified by regulators globally, clarifying that there are three main types of prohibited anti-competitive behaviour in labour markets:

1. No-poaching;
2. Wage-fixing; and
3. Exchange of competitively sensitive information in labour markets.

Importantly, this type of conduct does not have to occur by way of a formal agreement.  A wide variety of informal arrangements, including those made via trade associations or at industry meetings (or even at the pub), could give rise to a competition law risk. The prohibition applies not only to businesses which directly compete with one another, but also those which may compete for the same talent across different levels of a vertical supply chain.  

No poach

No-poaching agreements involve one business agreeing not to hire or solicit another business's employees and are generally prohibited under the Competition Act 1998. These can include no-hire or no-cold-calling arrangements (i.e. where businesses agree not to approach each other's employees about job opportunities), and may still be unlawful even if they are one-sided.

They differ from no-solicitation often clauses found in commercial contracts (such as consultancy or secondment arrangements), where a client agrees not to hire the service provider's staff during or shortly after the contract. These clauses may be lawful if they are necessary, proportionate, and limited in scope, duration, and geography.

Wage fixing

Wage-fixing occurs when businesses competing for the same types of employees agree to fix pay, benefits, or other employment terms, and is similarly made unlawful by the Competition Act 1998. This can include, for example, agreeing on uniform wage increases or setting salary caps. Reflecting the general approach taken to such anti-competitive agreements under competition law, the Guidance provides the following examples of informal arrangements that would be prohibited:

1. A number of competing companies regularly participate in an industry forum to discuss regulations, standards, and other developments. Each member mentions to the others that they are facing pressure to raise wages, and they all agree to cap salary increases for those roles at 2% for the year.  This would be illegal wage fixing.
2. At the start of each year, a trade association representing businesses in a sector circulates recommended pay rates for various technical roles.  This practice is likely to be considered an illegal wage-fixing, as it removes the degree of competitive uncertainty between the firms that form part of this trade association.

Exchanging competitively sensitive information and benchmarking

The CMA acknowledges that information exchange between businesses can be beneficial, particularly for HR professionals, by enabling efficiencies and helping them make informed decisions about market practices. However, such exchanges can breach competition law if they involve competitively sensitive information, i.e. that which:

1. reduces uncertainty in the market, and/or
2. influences competitors' strategies (e.g. hiring or pay decisions).

Ultimately, whether an exchange is an illegal breach of competition law turns on several factors:

1. The nature of the information: This includes whether the information is public or confidential (public information is generally unlikely to be considered competitively sensitive); aggregated or individualised (the more easily information can be attributed to a specific business, the more likely it is to be considered competitively sensitive, including where aggregated data can be reverse-engineered to reveal strategic insights); and whether it relates to past, current, or future practices (older information is less likely to be sensitive, while future information is more likely to be).
2. How the information is shared: Even unilateral disclosures of competitively sensitive information can pose risks to the recipient, as they may be presumed to have acted on the information. A party receiving such information should clearly distance itself; for example, by responding with a statement that it does not wish to receive the information and will not act on it.
3. The market context: This includes the extent to which receiving the information reduces uncertainty in the market and influences each business's strategy. Factors such as the degree of market concentration may heighten the degree of risk.

The following types of behaviour are more likely to raise competition law concerns, as they involve the non-public, specific, and illegitimate exchange of information:

1. Bilateral or unilateral disclosure of current or future pay intentions: This includes informally asking for, or sharing, non-public current pay rates for freelance roles, or future wage strategies or intentions (such as the way that rates are determined) between HR contacts.
2. Multilateral exchange of pay information: This includes situations where HR teams from multiple firms regularly share intended freelance pay rates (whether via third-party intermediaries, or directly).  For example, it is common for third-party consultancies to aggregate wage and working condition data to produce a benchmarking report.  However, if one of these reports involves only a small number of firms (e.g. three), it may be possible to reverse-engineer the average pay rates to identify individual firms' wage strategies, which could raise competition law concerns.
3. Legitimate meetings that stray into sensitive topics: Industry discussions that begin with lawful intentions, such as engaging with government or discussing new regulations, but then shift into conversations about pay and recruitment strategies.

Collective bargaining

Beyond focusing on the three main forms of anti-competitive conduct in labour markets, the Guidance also sheds light on how behaviour relating to collective negotiations between workers and employers may be treated by the CMA.

In particular, it highlights that collective bargaining, when undertaken by workers' organisations, can justify the coordination and exchange of information about wages and job terms to support effective negotiation.  By contrast, the use of collective bargaining processes by employers to coordinate on pricing or labour conditions may give rise to an illegal cartel.

When sharing such information, employers should be mindful of the usual factors that determine whether an exchange is problematic under competition law, for example, whether the information is historic and aggregated, or whether it involves detailed insights into future plans.

Why should you care?

The publication of this Guidance reflects a growing trend of enforcement action by competition authorities globally (including the CMA) against companies that breach competition law in labour markets. Such breaches are generally treated as serious “by-object” infringements, meaning they are illegal regardless of their actual effect on the market. In the UK, consequences can include significant fines (up to 10% of a business's worldwide turnover) and, in more serious cases, criminal liability and director disqualification for those involved. 

For example:

1. Earlier this year, the CMA issued an infringement decision and fines of over £4 million against five sports broadcasters and production companies for unlawfully exchanging sensitive information about freelance pay (including day rates and pay rises for pundits and presenters covering rugby and football matches), in order to coordinate payment practices.  The CMA has published a helpful case study summarising how the conduct of these businesses allegedly infringed competition law, the actions the CMA took in response, and some key lessons (which are reflected in the Guidance). This is available here.
2. The European Commission recently fined Delivery Hero and Glovo (two major food delivery companies) a total of €329 million, alleging a cartel involving reciprocal no-poach agreements relating to both key staff and (later) all staff. More information on this case can be found in our article on the decision here.
3. The French Competition Authority imposed fines of €29.5 million on four companies in the  engineering, technology consulting and IT services sectors for agreements not to poach each other other's engineers and business managers.
4. In the US, the Department of Justice has initiated at least seven criminal antitrust indictments based on alleged no-poach or wage-fixing agreements, having launched the first investigation of this type four years ago.  In April 2025, it secured its first jury trial win in a criminal wage fixing case (United States v Lopez).

These cases send a clear signal that practices previously overlooked by competition authorities are now firmly under scrutiny.  Authorities are increasingly committed to upholding fair competition in labour markets with the same rigour applied to traditional product and service markets.  In its Annual Plan for 2025/26, the CMA has signalled a continued interest in labour markets, which it sees as an important driver of economic growth and productivity in the UK. Similarly, the CMA recently identified “no-poaching” as an example of serious cartel activity in its updated leniency guidelines.  See Our Thinking on these changes to the leniency guidelines and how this may impact competition enforcement generally here.

What can you do about it and how can we help?

To avoid potential liability, proactively putting in place several lines of defence is crucial, including:

1. ensuring that HR and other employment teams are aware, through training, of the types of practices that may raise competition law concerns;
2. making sure staff have easy access to resources that explain which behaviours are likely to raise competition law risks;
3. removing any problematic clauses from template contracts, and auditing existing commercial agreements to ensure that they do not contain no-poaching or other sensitive provisions; and
4. having in place clear, robust and accessible policies for reporting any potential breaches of competition law.

Hogan Lovells' globally coordinated employment and competition practices are highly experienced in helping companies establish effective lines of defence across jurisdictions.  We are well-placed to advise where a potential breach may have occurred in one or more jurisdictions.  Let us help you navigate this evolving area of competition law, and, where necessary, engage with regulators and other relevant stakeholders.

Authored by Chris Hutton, Christopher Peacock, Karman Gordon, James Dayman.