The parties settled on favorable terms for the defendants in this labor matter involving a no-poach agreement.
Retained by Shearman & Sterling; Thomson Hine; and Squire Patton Boggs
Plaintiffs alleged that a no-poach agreement among the defendants—three defense contractor firms—suppressed pay and prevented them from seeking better employment opportunities. Counsel for the joint defense retained Cornerstone Research to support Justin McCrary of Columbia University to analyze these claims at the class certification and merits stages of this matter.
The three defense contractor firms together bid for and won a government project. The teaming agreement between two of the firms included a no-poach clause that prohibited the two firms from soliciting each other’s employees while they were assigned to this project. Plaintiffs alleged that there were similar, unwritten agreements among these two firms and the third firm. Plaintiffs sought to certify a class of nearly 650 employees who worked for the three defense contractor firms from 2015 to 2022 at a U.S. military installation in England.
Professor McCrary conducted several analyses in this matter:
- He reviewed industry-wide defense contractor employee mobility relevant for market definition.
- He analyzed compensation patterns that yielded results inconsistent with plaintiffs’ theory of harm.
- He found procompetitive benefits associated with the no-poach agreement, as well as benefits to putative class members.
- He identified flaws in plaintiffs’ expert’s damages model and demonstrated that, after correcting these flaws, the model showed no evidence that the no-poach agreement impacted compensation.
Before the judge ruled on class certification and summary judgment motions, the parties settled on favorable terms for the defendants.
For more information, contact Bryan Ricchetti or Kavan Kucko. Other team members that worked on this matter include Ofer Coen and Ashely Vissing.