Matt Levine’s latest Money Stuff column at Bloomberg explores the fuzzy line between antitrust violations and simply minding your manners. The difference is not as obvious as you might immediately think:
What would make those calls criminal? If Dimon said “don’t hire from us and we won’t hire from you,” and McFarlane said “you have yourself a deal,” then that would be bad. “Going forward, the DOJ intends to proceed criminally against naked wage-fixing or no-poaching agreements,” the Justice Department announced last year, and it noted that informal “gentleman’s agreements” can still count as criminal conspiracies. (“There have been no improper agreements and we continue to hire from each other,” says JPMorgan, and Barclays “insiders vigorously rejected any suggestion that such an agreement was entered into” and pointed out that it keeps hiring from JPMorgan.)
But what if Dimon was like “hey all this hiring is rude and you should stop,” and McFarlane was like “I suppose it is rude, we’ll stop.” What if Dimon called McFarlane and just said “really?” and waited in silence until McFarlane was like “yeah, okay, fine.” I have no idea what anyone said to anyone else. But it does seem to me like leaving a senior job at one bank to become the CEO at another, and then poaching a ton of senior people from your old bank all at once, is kind of rude and disruptive to your old friends and colleagues, and you might not want to do it, not because of an illegal “gentleman’s agreement” but out of a general social sense of gentlemanliness. (Or you might forget your manners, and be reminded, and repent.) What if Barclays really did slow down its hiring of JPMorgan employees because it concluded that there was a social norm against all that hiring? Isn’t a “social norm” just another name for a “gentleman’s agreement”? Isn’t it a shared informal understanding about what should and shouldn’t be done? Does that make it an antitrust violation?