Knorr, Wabtec, Faiveley Facing Antitrust Suit Over Alleged ‘No-Poach Agreements’

New to ClassAction.org? Read our Newswire Disclaimer

Knorr-Bremse AG, Westinghouse Air Brake Technologies Corporation (Wabtec), Faiveley Transport S.A., and several of their respective subsidiaries have been accused in a proposed class action of unlawfully suppressing competition by agreeing not to solicit, recruit, or hire each other’s employees. Deemed in the complaint as “three of the world’s largest rail equipment suppliers,” the defendants supposedly entered into “No-Poach Agreements” by which they colluded to deny employment opportunities to each other’s workers. The effect, according to the lawsuit, was that workers such as the plaintiff were not offered competitive employee benefits that would have been available absent the defendants’ alleged collusionary agreement:

“In a competitive labor market, Defendants and their subsidiaries would compete with one another, as well as with firms at other tiers of the rail industry supply chain, to attract, hire, and retain skilled employees by offering attractive salaries, benefits, training, advancement opportunities, and other favorable terms of employment.”

According to the complaint, the defendants, however, may have harmed themselves as an unintended consequence of their alleged competition-suppressing activities:

"Specifically, through poaching, a company, is able to save costs and avoid risks by taking advantage of the efforts its rival has expended soliciting, interviewing, and training employees, while simultaneously inflicting a cost on the rival by removing an employee on whom the rival may depend. Thus, if each Defendant was truly acting in its own independent self-interest, it would solicit the others' employees, including through offers of increased employment benefits and pay.”

The plaintiff claims he earned less compensation than he would have in a competitive market because of the defendants’ supposed conduct.

Notably, the Antitrust Division of the U.S. Department of Justice (DOJ) announced on April 3, 2018 that it settled a civil action against Knorr and Wabtec involving antitrust claims, but, according to the suit, “the DOJ is not seeking restitution on behalf of employees who were injured by [the defendants’] No-Poach Agreements.”