Antitrust Risks to Human Resources Professionals
Involved in Information Sharing

A consultant calls and asks you to participate in an industry salary survey. You attend a meeting with other human resources managers in your industry and the conversation turns to plans to hold the line on compensation for recent college graduates. Your industry trade association asks you to participate in a benchmarking session. Each of these common, seemingly innocent situations may result in a conspiracy to fix compensation, which is a violation of antitrust laws. If so, your company and the individual participants could be jointly and severally liable for three times the actual damages sustained by employees whose compensation is affected, plus attorneys’ fees.

A federal court of appeals decision, Todd v. Exxon Corporation, 275 F.3d 191 (2^nd Cir. 2001), illustrates the risk. In Todd, an Exxon employee brought suit against Exxon and thirteen other oil companies, alleging that the defendants engaged in a price fixing conspiracy by conducting frequent, detailed compensation surveys, benchmarking job levels and conducting frequent meetings, and giving each other verbal assurances that the information would be used to set employees’ salaries. The court of appeals held that the plaintiff’s allegation stated an antitrust claim.

You need to obtain information about compensation levels in your industry and geographic area; however, you must do so without exposing your company to antitrust liability. In light of the Todd ruling, can you continue to participate in compensation surveys? The answer is “yes,” provided the survey is properly conducted. When evaluating whether to participate in a survey with other industry participants, you should consider whether the following factors are present, all of which increase the antitrust risk:

· Is forward-looking information being shared?

· How frequently is the information collected and shared?

· Is the information identifiable to individual participants?

· Are the results presented in an unaggregated manner?

· Will the results be made available only to participants (i.e., not released to the public)?

· Are the results presented at a meeting?

By properly managing these factors, the antitrust risk associated with participation in a compensation survey can be lessened.

For additional information, please contact Anthony Aaron.