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Knorr, Westinghouse, Other Rail Companies No-Poach Antitrust Class Action

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Illustration of Train Braking System

The complaint for this class action alleges that the anti-competitive agreements between rail companies in this case were aimed not at limiting technology or suppressing new products or keeping prices high. They were aimed at limiting competition for workers and keeping wages and salaries down. The defendants in this case include railway-related companies Knorr-Bremse AG, Knorr Brake Company, New York Air Brake Company, Westinghouse Air Brake Technologies Corporation (Wabtec), and Faiveley Transport North America.

The class for this action is all persons employed by the defendants in this case or their wholly-owned subsidiaries at any time from 2009 to the present.

According to the complaint, the companies agreed not to “solicit, recruit, or hire each other’s employees without prior approval, or otherwise compete for employees…” The complaint says that this “substantially limited US rail industry workers’ access to better job opportunities, restricted mobility, and deprived them of information useful in negotiating better terms of employment, including higher compensation.”

The complaint claims that on April 3, 2018, the Antitrust Division of the US Department of Justice (DOJ) filed a civil antitrust action and announced a settlement with Knorr and Wabtec. It charged the two companies with unlawfully agreeing to restrain competition in their labor market, a violation of Section 1 of the Sherman Act. It also charged the two with entering into No-Poach Agreements with Faiveley.

However, the DOJ case and settlement merely penalize the companies for their antitrust activities. They do not provide compensation for workers who have been injured by these agreements, which is why this case has been filed.

The complaint claims that the agreements began almost a decade ago, with a 2009 agreement between Knorr and Wabtec. It claims that a 2010 internal communication shows that even considering unsolicited applications from employees of the other company was not permitted. In 2011, the complaint says, a similar agreement was made between Knorr and Faiveley, and then another in 2014 between Wabtec and Faiveley.

The complaint claims that the agreements lasted until 2015, when Wabtec announced it was acquiring Faiveley. After that, the complaint says, Knorr directed its recruiters to try to hire Faiveley employees.

The DOJ found that the agreements between the rail companies “disrupted the normal bargaining and price-setting mechanisms that apply in the labor market” and were therefore illegal. The complaint asks the court not only for an injunction against any further such behavior but also “treble damages, as well as punitive or exemplary damages” with interest, in order to compensate the employees who were harmed by the illegal agreements.  

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