The Polish competition authority – Urzad Ochrony Konkurencji i Konsumentow (UOKiK) – is actively investigating potential collusion in the labor market.
In early 2024, the UOKiK conducted searches at the headquarters of Jeronimo Martins Polska, Dino Polska, and associated transport companies. The investigation focuses on whether transport companies working with the Biedronka and Dino retail chains engaged in non-poach arrangements, whereby they agreed not to compete for each other’s employees, specifically drivers. If proven, such agreements would restrict job mobility for drivers and slow wage growth.
This case highlights a broader issue: many employers may not fully realize that competition law applies to the labor market in the same way it does to other industries. To address this, the UOKiK has published a guide titled Collusions in the Labor Market. The guide offers an analysis of anti-competitive practices in employment.
This guide follows a May 2024 publication by the European Commission called Antitrust in Labor Markets which emphasizes that wage-fixing and no-poach agreements qualify as violations under Article 101(1) TFEU and are often handled by national authorities due to their local impact.
Understanding Labor Market Collusion
The UOKiK guide signals a growing interest in preventing collusive practices within the labor market. The guide explains that in competition law, an “agreement” refers broadly to any formal or informal arrangement between two or more parties that influences competition.
For instance, even informal conversations about HR practices or employee information can be seen as anti-competitive if they restrict the ability of companies to compete fairly for talent.
Common Forms of Labor Market Collusion
Wage-fixing agreements: One of the most damaging types of labor market collusion is wage-fixing, where companies agree to set salaries at a fixed level. This practice stifles fair competition for labor, leading to stagnant wages and limited opportunities for employees to negotiate higher pay or better terms.
No-poach agreements: Another prevalent form of collusion is the implementation of no-poach agreements. This practice limits job mobility for workers, making it difficult for them to advance or seek better employment offers. This, in turn, can trap employees in their current positions, preventing them from advancing their careers.
Exchange of employment conditions: Collusion can also occur when companies share sensitive information about employee benefits, health insurance, time off, remote working policies, training programs, etc. This can lead to uniformity in employment conditions and distort competition within the labor market.
Penalties for Violating Competition Law
Companies found guilty of a breach of competition law can face significant penalties, such as up to 10% of a company’s turnover of the year preceding the infraction. In addition, individual board members who knowingly violated the ban on anti-competitive agreements may be fined up to PLN 2 million.
What This Means for Employers
The publication of the UOKiK guide should be considered as a clear signal that labor market collusion is under increasing scrutiny. Companies should take this opportunity to review whether they are operating in compliance with the law and train their employees to be aware of the applicable legislation and the risks and regulations around anti-competitive agreements in the labor market.
By Agnieszka Nowak-Blaszczak, Head of Employment, Wolf Theiss
This article was originally published in Issue 11.10 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
