Trade restrictions on workers are very common. They are largely subject to the common law of trade restrictions, as they are generally excluded from the provisions of the Law on Cartel Behaviour and Abuse of Dominant Position. It is important to be aware of these exceptions, especially the extent to which they go. There is no general exception in the Trade Limitation Act. Whether it is exempt depends on the parties to the deduction and the activities to which it extends. Section 4M (a) of the Act expressly states that the law “does not affect the application of the Trade Restriction Act, as long as that law can operate at the same time as that law.” While this section recognizes the existence of trade restrictions, it does not exempt them from the behaviour provisions of cartels. To do so, we need to look at the definition of “services” and 51 (2) of the legislation. The definition of “services” may allow an agreement between competing companies not to solicit the staff of the other. A provision in an agreement between two competitors limiting the acquisition of “services” from certain categories of persons would be a provision of the agreement, but “services” do not include “the provision of work under a service contract,” so an agreement prohibiting competitors from offering employment to employees of the other company may be tax-exempt.
In addition, firms that compete to attract workers are known to face trade restrictions that limit their ability to attract staff from the other. These include an assessment of the markets involved and the extent of possible competition restrictions, including consideration of the impact on consumers. For example, while prices are likely to be higher than they would otherwise be because of the restriction at issue, it is difficult to imagine that the CMA or the courts would willingly accept that such a restriction would be eligible for an exemption. Indeed, the CMA recently fined Heathrow Airport for awarding a hotel rental contract that did not allow the hotel to under-perpetize airport parking charges (we reported this case here). Trade restrictions are at the forefront of competition law (also known as “antitrust”) and in class actions in the United States. In the United States, cartel and abuse of dominance is governed by the Sherman Act. Section 1 of the Sherman Act states that (5) An order under the subsection (3) does not affect any rights (including a right to compensation) that was obtained prior to the effective date of the order. If the only way to introduce a new product in a cost-effective way is to curb legitimate competition from older products, seriously consider whether consumers are actually benefiting from the new product.  The possibility of imposing trade restrictions is a complex area, but for current purposes, it is sufficient to consider the following points. In other cases, the question was raised as to whether the deduction was necessary and incidentally necessary to obtain something unworthy of recognition, given the resulting damages.