On 9 September 2025, the Competition and Markets Authority published guidance on Competing for talent, setting out cases where businesses may breach competition law through hiring employees and/or setting their employment T&Cs, including in relation to pay.  The guide outlines what businesses can do to avoid breaking the law when working to recruit and retain workers and HR professionals and legal teams should remind themselves of the risks in certain behaviour.

Anti-competitive behaviour:

The CMA highlighted three main types of anti-competitive behaviour which may arise in relation to employment practices:

  • No-poaching – where businesses agree not to hire or poach another business’s employees, including no-hire and no-cold calling agreements. These are different from no-solicitation clauses often found in secondment or consultancy agreements, which may not infringe competition law if they are necessary, proportionate and do not go beyond what is reasonably required.
  • Wage fixing – where businesses agree to fix pay, benefits or other terms and conditions of employment. This can include agreeing the same wage increase rates, setting caps on pay, or implementing recommended pay rates within a sector from a trade association.
  • Exchanging competitively sensitive information and benchmarking – this includes information which reduces uncertainty as to the operation of the market in question or could influence the competitive strategy of other businesses. Benchmarking can be a helpful tool for those involved in HR management to make informed decisions about things such as pay, benefits and recruitment strategies.  Employers, however, have to be mindful that exchange of such information is not in breach of competition law and this will depend on the nature of the information, how the information is exchanged and market characteristics. 

Anti-competitive behaviour can be through formal or informal arrangements and can include agreements between businesses, or even unilateral disclosures. Information shared socially or at industry events and so-called “gentlemen’s agreements” may still be caught by competition law.

Collective bargaining:

The CMA also makes the point that employers in collective bargaining may need to coordinate how their side will approach negotiations, and this is an important part of collective bargaining. As such, the CMA indicates that they will not enforce competition law in these cases, subject to the following conditions:

  • The information is shared as part of a coordination process to help collective bargaining.
  • Employers only share competitively sensitive information that is absolutely necessary as part of preparation for collective bargaining.
  • The purpose of exchanging information cannot be achieved by any other means. For example, consider if an independent party aggregating and anonymising data before it is shared would still satisfy the purpose of the exchange of information.

Consequences:

There are significant consequences for anti-competitive behaviour:

  • Business may be fined up to 10% of their annual worldwide turnover, may be prevented from bidding for public contracts or may be exposed to private damages.
  • For individuals, prosecution for involvement in cartel activity carries a sentence of up to 5 years’ imprisonment, and company directors may be disqualified from managing a company for up to 15 years.

Recipients of competitively sensitive information will be presumed to have taken such information into account unless they publicly distance themselves from the information or report the contact to the appropriate authority. The CMA offers a strong leniency policy and may offer immunity to businesses that report instances of anti-competitive behaviour.

Practical advice for businesses to avoid breaking competition law:

  • Be aware of how competition law applies to labour markets. Do not form agreements with other businesses or share competitively sensitive information relating to employment practices.
  • Provide competition law training to any staff involved with recruitment or HR, including how this applies to them. Ensure that HR staff are aware that informal conversations in a social setting or within trade associations may still be caught by competition law where there is an exchange of competitively sensitive information.
  • When using benchmarking, make sure that any information is publicly available, and/or is appropriately anonymised and aggregated such that information cannot be attributed to a particular business. This will prevent information being classified as competitively sensitive.
  • Ensure there are reporting processes in place and staff are sufficiently aware of these – the CMA operates a leniency policy, and a business may be able to avoid fines by reporting anti-competitive behaviour.

Thank you to Emma Torok for her help in preparing this post.