Forces US$2.5 million settlement ending harmful no-poach agreements

New York Attorney General Letitia James has ended what is regarded as harmful labour practices in the insurance sector in that State.

She has announced a settlement with one of the largest title insurance underwriters, Stewart Title Guaranty Corporation (Stewart), ending harmful no-poach agreements between Stewart and its competitors. The settlement demands that Stewart pays US$2.5 million for its wrongdoing. 

The Office of the Attorney General (OAG) discovered that Stewart and its competitors agreed not to take each other’s workers, an illegal practice that reduces workers’ earning potential. As a result of the agreement, brokered last Thursday, Stewart will terminate any existing no-poach agreements, pay the state US$2.5 million and cooperate with OAG’s ongoing investigations in the industry. 

According to James, “no-poach agreements harm New York workers and break New York laws. When business owners collude to stifle workers’ abilities to earn higher salaries and grow within their career fields, it hurts hardworking New Yorkers. 

Stern warning issued

She warned that, “businesses that try to hold workers’ hostage will face the consequences of their illegal actions.” Explaining that Stewart issues title insurance policies either directly through its own agency or indirectly through independent title insurance agencies, James argues that direct agents and independent agencies are competitors in the labour market.

As such, she dictates that businesses should be able to compete for employees on the basis of salaries, benefits and career opportunities arguing, “Stewart’s no-poach policies with other companies prevented that from happening”.

The New York Attorney General explains that a no-poach policy is an agreement between two or more companies not to solicit, recruit or hire each other’s employees. 

“In a well-functioning labour market, employers don’t need no-poach agreements and, instead, compete by offering higher wages or enhanced benefits to attract the most valuable talent for their needs,” James reiterates. 

She highlights that these agreements reduce competition for employees and disrupt the normal compensation-setting mechanisms which, in turn, harm the interests of employees. 

OAG investigations

The OAG’s investigation concluded that Stewart entered into no-poach agreements with other title insurance companies, and that these agreements effectively reduced career opportunities and wages for workers. 

James made the point that Thursday’s agreement ends Stewart’s no-poach agreements and to cooperate with OAG’s ongoing investigations in the industry. This agreement builds on Attorney General James’ past efforts to protect workers and stop these harmful no-poach agreements. 

In July 2022, James ended the use of “no-poach” agreements by two top title insurance companies, AmTrust and First Nationwide. In September 2021, New York Attorney General ended the use of “no-poach” agreements by another top national title insurer, Old Republic National Title. 

In March 2019, she and a coalition of attorneys general from around the nation entered into an agreement with four national fast food franchisors, Dunkin’, Arby’s, Five Guys, and Little Caesars that ended their use of “no-poach” agreements. 

Additionally, in July 2019, Attorney General James and a coalition of attorneys general submitted comments to the Federal Trade Commission, urging collaboration between regulators to protect workers from anticompetitive labor practices, including no-poach agreements, that depress wages, restrict job mobility and limit opportunities for advancement.