UK Competition Authority Publishes Guidance on Competing for Talent

On 9 September 2025, the UK Competition and Markets Authority (CMA) published new guidance on how competition law applies to recruitment and HR processes, “Competing for Talent” (the Guidance). The Guidance targets HR professionals, clarifying that competition law is equally relevant to how businesses compete for talent and providing practical tips on what type of interactions are more likely to cross the line in the UK.

The Guidance

The Guidance identifies three key anti-competitive behaviours of particular concern in relation to recruitment and HR processes, all of which are viewed as forms of business “cartels”, which are serious “object” infringements of UK competition law.

1. No-poaching agreements: Where businesses enter into formal or informal no-hire or no-solicitation agreements with each other.

• For example, if two HR managers informally agree not to approach or recruit each other’s employees without first checking with one another (e.g., to ensure the employee can be spared), this arrangement will likely be viewed as unlawful no-poaching.

Such arrangements do not have to be mutual to be caught by the prohibition on anti-competitive agreements.

The Guidance distinguishes between “no-poach” arrangements and contractual no-solicitation clauses that might be included in certain types of commercial agreements, such as secondment or consultancy agreements. These latter types of restriction can be permitted subject to certain requirements being met. A similar approach is taken to non-solicitation provisions in an M&A context.

2. Wage-fixing: Where businesses competing to hire the same type of employee agree to fix pay, benefits, or other employment terms, including where they agree on wage-increase rates or pay caps.

• For example, if managers at different companies who know each other from previous roles meet socially and informally agree to limit pay increases for certain roles to control costs, this is to be viewed by the CMA as illegal wage-fixing.

Notably, the Guidance confirms that wage fixing can take place through agreements reached at industry forums or through a trade association’s pay rate recommendations.

3. Exchanges of competitively sensitive information: The exchange of labour-related information between businesses can often be beneficial and pro-competitive, for example, by facilitating more informed decision-making around hiring talent. However, when competitors share competitively sensitive information, such information sharing has the potential to restrict competition and violate competition law.

With regard to labour markets, information is competitively sensitive if it:

• Reduces uncertainty as to the operation of the labour market in question. That is, if it gives competitors insights into how its competitor’s business is likely to act, such as their approach to setting salaries or making hiring decisions.
• Could influence the competitive strategy of other businesses with regard to labour practices, such as pay. That is, if it enables competitors to align their decisions on relevant areas, rather than having to compete independently.

Even unilateral disclosures of competitively sensitive information to competing businesses can break competition law.

In considering when information sharing crosses a line, the nature of the information shared, how it is exchanged and the relevant market characteristics are important. For example, sharing information that is outdated (i.e., historic), publicly available, or aggregated/anonymous is less likely to raise competition law concerns than sharing future or confidential information, or information specific to a business.

The Guidance gives examples of exchanges that are more likely to be problematic, including:

• Bilateral exchanges or unilateral disclosure of future pay intentions.
• The exchange of non-public information about current pay.
• Certain information about other terms and conditions of employment may also, in some circumstances, be considered competitively sensitive.

Benchmarking

The CMA recognises that benchmarking activities are common in labour markets, and the Guidance clarifies that benchmarking activities can be permitted, for example, where a company benchmarks against publicly available data, or where benchmarking data is prepared by a third party and reports only aggregate, anonymous information.

The benchmarking of HR issues that are not commercially sensitive is also less likely to breach competition law, for example, where HR professionals come together to address skills gaps in a particular segment.

However, companies must take care that benchmarking activities do not involve the direct or indirect exchange of competitively sensitive information.

Collective bargaining

The Guidance also addresses the CMA’s position on collective bargaining, with worker’s organisations such as trade unions, around employment terms such as pay rates and working conditions, or the strategy for such negotiations.

Whilst the CMA recognises that genuine negotiations between employers and worker organisations are an important part of labour market dynamics and confirms that it will not enforce competition law against them, it remains important to avoid practices that could be considered wage-fixing or unlawful information sharing when preparing for and engaging with collective bargaining discussions, both from the employees’ and the employer’s side.

The CMA’s approach here follows a January 2024 speech by the CMA’s Chief Executive, Sarah Cardell, in which she indicated that the CMA would adopt a similar approach to collective bargaining in line with other international competition authorities and would treat collective bargaining as being outside the scope of competition law enforced by the CMA.

Expect Continued Focus on competition and labour, including potential legislative reform

There has been increased scrutiny on labour markets from antitrust agencies globally, including in the US, where the DOJ recently secured a jury conviction for criminal wage fixing (United States v. Eduardo Lopez) and in the EU, where the European Commission imposed fines of EUR 329 million in relation to no-poach agreements in the online food delivery sector.

Publication of the Guidance comes following a string of work by the CMA on this issue, including the CMA’s 2024 Microeconomics Unit report, “Competition and Market Power in UK Labour Markets”, which explored links between market power in labour markets and poorer economic growth. This work has informed ongoing competition enforcement by the CMA, and while not every case has proceeded (an investigation into alleged wage fixing was closed on administrative priority grounds) in March 2025, the CMA issued its first labour market infringement decision, imposing fines exceeding £4 million on five sports broadcast and production companies for sharing information about pay for freelance workers. An investigation into alleged coordination with respect to hiring and recruitment in the fragrance sector which opened in March 2023, is still ongoing.

This enforcement trend shows no signs of slowing. In its Annual Plan for 2025/26, the CMA indicated a continued focus on competition law and labour, as it seeks to support the government’s proposed industrial strategy, recognising a link between well-functioning labour markets and economic growth.

Relatedly, the government confirmed in July of this year that it intends to consult on proposals to reform non-compete restrictions in employment contracts as part of significant proposals for employment law reforms. This news comes as something of a surprise, following the decision of the former conservative government to drop its original proposals to limit non-competes in employment contracts to three months. In response to a debate about the use of AI in employment as part of the House of Lords debate on the Employment Rights Bill on 21 July 2025, government Minister Baroness Jones confirmed that the government will be consulting on options for reform in “due course”.

As such, we can expect the CMA’s interest in recruitment and other HR practices to continue.

If you have any questions about how the new Guidance applies to your recruitment or HR processes, please feel free to reach out to our team for a confidential discussion.