Illinois Supreme Court Questions Legality of Staffing Agencies’ No-Poach Agreements

The Illinois Supreme Court justices expressed skepticism over interpretations of a state antitrust law that allegedly enabled temporary staffing agencies to collaborate in setting worker wages and suppressing competition for employees.

According to Bloomberg, the focus of the legal scrutiny was on no-poach and wage-fixing agreements orchestrated by staffing agency rivals Elite Staffing Inc., Metro Staffing, and Midway Staffing Inc., along with their shared client, Colony Display. State Attorney General Kwame Raoul (D) has contended that these agreements violate the Illinois Antitrust Act.

The legal battle stems from a lawsuit filed by Attorney General Raoul in 2020, accusing the companies of leveraging their common client, Colony Display LLC, to establish no-poach agreements that, in turn, facilitated a secondary arrangement to pay workers less than the prevailing market rate.

Raoul, in a news release at the time of the lawsuit, emphasized the detrimental impact of no-poach agreements on workers: “No-poach agreements allow employers to take advantage of low-wage workers by trapping them in low-paying jobs and limiting their opportunities for advancement.”

The three implicated companies, Elite Staffing Inc. based in Chicago, and Midway Staffing Inc. and Metro Staffing Inc., both headquartered in Chicago suburbs, had all contracted with a construction company located in the suburbs. Colony Display LLC, based in Elgin, specializes in designing and constructing display models and custom furniture for commercial properties such as motels, grocery stores, and restaurants. While the company operates in seven states, the majority of its furniture manufacturing, assembly, and storage activities are centralized in three Illinois warehouses.

The Supreme Court’s oral arguments on Wednesday underscored the critical examination of the legality of the alleged collusion between staffing agencies, raising questions about the broader implications of such practices within the employment landscape. As the legal proceedings unfold, the outcome will likely have far-reaching consequences for the regulation of labor practices and antitrust laws in the state of Illinois.