WASHINGTON (Reuters) - Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp (Wabtec) (WAB.N) have agreed to scrap an illegal agreement to refrain from poaching each other’s employees, the Justice Department said on Tuesday in announcing a settlement with the two rail equipment suppliers.
The two companies had agreed as early as 2009 not to recruit or hire each other’s workers without prior approval, the department said. A third company, Faiveley Transport S.A., also participated in the agreement until it was purchased by Wabtec in 2016.
No-poach agreements are illegal under antitrust law since they restrict competition for employees, and potentially deprive workers of better job opportunities, the department said.
Wabtec said in a statement that it had settled even though it committed no wrongdoing.
“We firmly believe that our recruiting policies have been consistent with the antitrust laws and have in no way diminished competition for talent in the marketplace,” the company said. “We have elected to settle this matter to avoid the cost and distraction of litigation.”
The companies supply rail companies with train control, braking and door equipment for passenger rail vehicles. They are each other’s top competitors, the department said in its complaint.
Reporting by Diane Bartz in Washington; Editing by Matthew Lewis