[Varuni Jha is a fourth-year B.A. LL.B. (Hons.) student at Dr. Ram Manohar Lohiya National Law University, Lucknow]
Competition enforcement in India follows a set script, concerning itself with price-fixing, bid-rigging, and abuse of dominance in product markets. Labour markets sit outside that script almost entirely, and no-poach agreements, or arrangements between competing employers not to recruit each other’s employees, are the clearest example of what gets overlooked. By eliminating competition for labour, such agreements suppress wages and restrict employee mobility just as a product market cartel suppresses prices and restricts output. What has been missing is a regulator willing to treat them as such.
That changed in August 2025, when the Competition Commission of India (“CCI”) ordered a formal investigation into three global fragrance giants – Givaudan SA (“Givaudan”), DSM-Firmenich AG (“Firmenich”), and International Flavors & Fragrances Inc. (“IFF”) – over allegations of a multi-decade no-poach arrangement. In April 2026, the Delhi High Court dismissed IFF’s challenge to the investigation, allowing India’s first labour antitrust case to proceed (“IFF Case”).
This article works through what that means for the Competition Act, 2002 (“Competition Act”), and where Indian competition enforcement is heading in labour markets.
What the CCI Found
Reuters reported that the investigation was triggered not by a competitor complaint but by a leniency application, in which one of the three companies approached the CCI with evidence. On the basis of at least 30 emails, the CCI found that the three had maintained a “gentlemen’s agreement” since 2002 not to hire or poach each other’s employees, or even the employees of their shared customers, without the current employer’s prior approval.
This global, coordinated scheme, spanning over two decades, has run parallel to ongoing investigations by antitrust authorities in the European Union (“EU”), the United Kingdom, and Switzerland into the same companies for alleged price-fixing. The CCI concluded that examining it is “critical to prevent labour exploitation and promote competitive remuneration.”
IFF challenged the order before the Delhi High Court, arguing the investigation violated the three-year limitation period under section 19(1) of the Competition Act. A Division Bench dismissed the challenge in April 2026, deferring to the CCI’s procedural discretion at the prima facie stage. The substantive questions now fall squarely on the CCI.
What Other Jurisdictions Have Established
The idea that competition law could govern employer conduct in labour markets is relatively recent and was not without resistance.
United States
In the United States, no-poach agreements were long treated as a matter of employment or contract law and early enforcement was civil. Between 2010 and 2012, the Department of Justice (“DOJ”) brought three actions against technology companies for agreeing not to cold call or hire each other’s employees – eBay and Intuit, Lucasfilm and Pixar, and a group comprising Adobe, Apple, Google, Intel, Intuit, and Pixar. Although these ended in consent judgments that set no precedent, the Court in United States v. eBay explicitly stated that “antitrust law does not treat employment markets differently from other markets.” Danielle Seaman v. Duke University and Duke University Health System found horizontal no-poach agreements to violate section 1 of the Sherman Act.
The 2016 Antitrust Guidance for Human Resource Professionals escalated matters, treating naked no-poach agreements as per se illegal and criminally prosecutable, which was expanded through the 2025 Antitrust Guidelines for Business Activities Affecting Workers. Critics argued that no prior court had held such agreements per se unlawful, that the DOJ had bypassed judicial development of the law, and that labour markets were not straightforwardly analogous to product markets. Criminal enforcement has reflected this resistance. The DOJ’s first no-poach indictment, United States v. Surgical Care Affiliates, LLC, was dismissed in November 2023, after consecutive jury acquittals in similar no-poach cases of United States v. DaVita and United States v. Manahe. In United States v. Patel, an acquittal was directed because the agreement, by allowing limited job-switching, did not cause a complete “cessation of meaningful competition.” This suggests that a blanket agreement without such carve-outs would have meet this bar. Although having secured its first criminal wage-fixing conviction in United States v. Lopez in April 2025, the DOJ is yet to win a no-poach case.
European Union
The EU came to the question later but has moved faster. The revised EU Horizontal Guidelines of July 2023 addressed labour market agreements for the first time, and the European Commission’s (“Commission”) May 2024 Competition Policy Brief on Antitrust in Labour Markets explicitly classified no-poach agreements as by-object restrictions. EU Member States have also acted independently: the Nordic competition authorities issued a joint report in 2024, and Portugal’s competition authority, the Autoridade da Concorrência, fined the Inetum group in February 2025 over a seven-year no-poach arrangement. The Commission’s own first sanction followed in June 2025, with a €329 million fine against Delivery Hero and Glovo for a labour market cartel.
The Court of Justice of the European Union (“CJEU”) ruled on the question for the first time in April 2026, in CD Tondela – Futebol, SAD and Others v. Autoridade da Concorrência, arising from a pandemic-era no-poach agreement among Portuguese football clubs. It held that agreements on the allocation of human resources are functionally equivalent to market-sharing under article 101(1)(c) of the Treaty on the Functioning of the European Union(“TFEU”), and are thus presumptively by-object restrictions. The CJEU nevertheless held back from automatic classification, applying a three-step test: the content of the agreement, the economic and legal context (such as market structure and sector traits), and whether the objectives pursued are legitimate or anti-competitive.
Both regimes confirm that no-poach agreements are within the reach of competition law.
What Indian Competition Law Says
The intuitive reaction is that no-poach agreements obviously violate competition law. Where exactly they fit within the Competition Act’s framework, however, is more nuanced since India has no prior jurisprudence to draw on.
The starting point is section 3(3), which governs horizontal agreements between enterprises “engaged in identical or similar trade of goods or provision of services.” Givaudan, Firmenich, and IFF are competitors in the product market, and they also compete horizontally in the labour market, drawing from the same specialised pool of perfumers, flavourists, and fragrance chemists, satisfying section 3(3)’s threshold.
The next question is which provision of section 3(3) applies. There are two candidates.
- Section 3(3)(b) is the cleanest fit, covering agreements that “limit or control production, supply, markets…or provision of services.” A no-poach arrangement does exactly this. By taking a competitor’s workforce off the table, it directly restricts the supply of available labour, fitting the sub-clause’s language without any interpretive stretch.
- Section 3(3)(c) covers agreements that “share the market or source of production…by way of allocation.” A no-poach arrangement is, in substance, an input-market allocation scheme, with employers carving up sources of labour supply. This sub-clause, however, enumerates allocation by geographical area, product type, or customer base, so applying it to labour requires relying on the residuary clause – “or any other similar way” – to treat this as an allocation of a source of production.
An agreement falling within section 3(3) carries a statutory presumption of causing an Appreciable Adverse Effect on Competition (“AAEC”). Rebutting this presumption requires showing, under section 19(3), that pro-competitive effects, such as consumer benefit, improved production or distribution, or technical or economic development, outweigh anti-competitive harms such as entry barriers and market foreclosure. The proviso to section 3(3) also exempts joint venture agreements that increase efficiency in the production, supply, or distribution of goods, or in the provision of services. Yet an industry-wide no-poach agreement spanning over two decades, covering all employees regardless of their access to confidential information, is difficult to justify as proportionate to any of these ends.
The principal obstacle in existing jurisprudence is Air India v. InterGlobe Aviation, where the CCI described pilot recruitment allegations as an “employment issue” outside competition law. That case, however, involved a complaint about unilateral predatory recruitment by one airline, not a horizontal agreement between competing employers. The CCI reached its “employment issue” characterisation without any finding of an agreement restraining hiring, which is the very allegation the IFF Case is built on. The two cases are thus, asking entirely different questions.
What Comes Next
The Delhi High Court’s order does not resolve whether no-poach agreements violate the Competition Act. It only confirms that the CCI’s investigation can proceed to the merits. That larger question, whether section 3(3) reaches labour markets at all, is now for the CCI to decide.
But the answer will matter well beyond the fragrance industry. Arrangements that have long sat comfortably in a regulatory grey zone, such as the informally reported no-poach understandings among private banks, would also invite scrutiny if the CCI’s answer is yes. Markets work better when competitors compete, and that holds for labour markets as much as any other. Employers are not a resource to be carved up between employers, and the IFF Case will test, for the first time in India, whether employer collusion to suppress employee mobility can still be waved away as a mere employment issue.
– Varuni Jha
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