As an employer, have you agreed with a recruitment agency that it will not approach the placed employee with other job offers for the entire duration of their employment with you? Or that, for the duration of your cooperation, the agency will not approach your existing employees? According to the Office for the Protection of Competition (ÚOHS), this is likely to constitute a cartel agreement. We have previously written on our blog about the competition risks posed by agreements in the labour market. We are now returning to the topic in light of the ÚOHS’s opinion on so-called ‘ancillary restraints’, which provides specific guidance on what is and is not permissible – whether in contracts with recruitment agencies or bans on approaching employees in M&A transactions.
Agreements concerning employees are treated by competition authorities as price-fixing cartels
Why is the ÚOHS interested in these types of contracts at all? If two or more employers agree not to poach each other’s staff or to set the same wages, competition law regards this as the equivalent of a classic price-fixing cartel – only on the opposite side of the market. Instead of companies agreeing on the price at which they will sell goods to customers, they agree on the price at which and from whom they will ‘purchase’ labour.
Both the European Commission and the ÚOHS state that such agreements are prohibited by their very nature; they are known as „by object“ agreements. There is no need to prove that these agreements had an actual impact on wages or on competition. The mere fact that they were concluded is sufficient.
A non-poaching commitment can therefore exist, in practice, only as a so-called ancillary restraint. Put simply: the clause must serve some main legitimate transaction, such as the acquisition of an undertaking or a contract with a recruitment agency and must be genuinely necessary for its implementation; in other words, if it had not been entered into, the transaction would not have taken place.
Four conditions must be met: there must be a main transaction which is unobjectionable in itself; the restriction must be directly related to it; it must be objectively necessary for its implementation; and it must be proportionate – that is, there must be no less restrictive means of achieving the same objective. The burden of proof lies with the contracting parties, not with the competition office.
The Office’s opinion uses practical examples to distinguish precisely how these conditions are met, particularly the criterion of proportionality – from this perspective, some seemingly standard clauses prove to be problematic.
Recruitment agencies: not every clause designed to protect employees is acceptable
The ÚOHS accepts that an employer, as a client of a recruitment agency, wishes to protect its investment in recruitment. It makes no sense for an agency first to find and place an employee with a client, only to then, with detailed knowledge of that employee’s working conditions, begin actively offering him to other employers. A clause obliging the agency not to approach employees it has itself placed may therefore be a permissible ancillary restraint. However, the specific terms of the agreement are important, particularly three aspects:
- Duration. The commitment may only last for as long as the agency retains an information advantage arising from the recruitment: that is, typically, it knows the employee’s current salary, conditions and profile well enough to be able to tailor a competitive offer specifically to them. Once this advantage disappears, the obligation loses its justification. Clauses such as ‘for the entire duration of the employment relationship’ therefore clearly cross the line, according to the ÚOHS’s opinion.
- Active approach versus employee initiative. The obligation may only cover active approaches by the agency. If an employee decides on his own initiative to ask the agency for help with changing jobs, the obligation cannot prevent this – restricting so-called „passive mobility,“ i.e. the agency’s ability to respond to the employee’s own initiative, is always a prohibited agreement.
- Scope of employees. The clause may only apply to employees whom the agency has itself placed. Blanket coverage of all the client’s employees goes beyond the scope of protecting the investment in recruitment.
When reviewing contracts with recruitment agencies, companies should therefore also pay attention to wording that may appear standard at first glance. Model contracts containing phrases such as „for the duration of the employment relationship,“ „all of the client’s employees“ or an absolute ban on recruitment are in breach of competition rules. Fines of up to 10 % of the group’s net turnover may be imposed.
Prohibitions on approaching employees in M&A transactions
In mergers and acquisitions, it is well established for a non-solicitation clause to protect the buyer rather than the seller. It is intended to prevent the seller from poaching employees from the buyer who the buyer has just acquired along with the business, thereby devaluing the buyer’s investment. A mutual commitment of this kind will therefore generally not be acceptable. It is also well established that a non-solicitation clause may apply for two years on a transfer of goodwill and for three years where know-how is also being transferred.
However, there is also a widespread perception that, where know-how is transferred, a three-year restriction can be applied across the board to all transferred employees. Here, however, the aspects of necessity and proportionality of the ancillary restraint come into play. The ÚOHS points out that it is not sufficient simply to state that the transaction „involves know-how.“ It is necessary to assess the role played by specific employees in protecting this know-how.
In other words, a longer period is an exception linked to a specific group of people whose departure would realistically jeopardise the value of the transaction. From this perspective, a blanket three-year ban on approaching employees covering the entire workforce of the acquired company becomes difficult to justify.
However, the specific circumstances of a transaction may also justify a departure from the general rule that protection applies only to the purchaser.
One exception highlighted by the ÚOHS is, for example, so-called „carve-out“ transactions, where only part of the business is sold and the employees working in that part had, prior to the transaction, worked in both the transferred and non-transferred parts of the business. If such an employee holds know-how that the seller requires for the remaining part of its business, in exceptional cases, the seller may also be protected against the buyer poaching that employee.
In the case of joint ventures, a commitment not to poach employees from the joint venture may be agreed. However, a mutual commitment by the parent companies not to poach their own employees cannot be accepted as an ancillary restraint.
The same rules apply to transactions that do not meet the turnover thresholds and are not subject to notification to the ÚOHS.
What HR and in-house lawyers should take away from this
What may previously have been regarded as standard practice now requires a more detailed analysis. This gives rise to three practical recommendations for companies:
- Review template contracts for cooperation with recruitment agencies and non-competition clauses – focusing in particular on the duration of the clause, the scope of employees covered, and the explicit exclusion of any impact on employees’ passive mobility.
- For forthcoming acquisitions, cease using a blanket three-year ban on approaching employees across the entire workforce of the acquired company in the event of a transfer of know-how. Where protection is extended beyond two years, be able to identify the specific group of individuals possessing the know-how.
- Update compliance materials and training programmes, whilst also reviewing contracts that have already been concluded. This applies not only to those where the obligation not to approach employees is still in force, but also to older contracts, as the ÚOHS may assess conduct retrospectively and examine contracts concluded several years ago from the perspective of cartel agreements.
The ÚOHS has repeatedly signalled that the awareness-raising phase in the labour market is coming to an end and the enforcement phase is beginning. Timely risk assessment is the first step towards addressing these risks and can help prevent significant damage. The ÚOHS does not hesitate to impose fines running into hundreds of millions of CZK on large companies.
Sources
Opinion of the Office for the Protection of Economic Competition on issues concerning the admissibility of so-called ancillary restraints in the context of agreements in labour markets, dated 20 May 2026.
ÚOHS Information Sheet 2/2023 „Competition aspects of labour market agreements.“
European Commission, Competition Policy Brief Issue 2/2024, „Antitrust in Labour Markets“ (May 2024).
Commission Notice on restrictions directly related and necessary to concentrations (2005/C 56/03).
