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25/07/18
 


The General Director of the Restrictive Trade Practices: Employers may not agree to refrain from competing over employees; a trade association may not recommend that its members refrain from competing over employees

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Date of Publication:
25/07/2018

-Press release-

 

The General Director of the Restrictive Trade Practices: Employers may not agree to refrain from competing over employees; a trade association may not recommend that its members refrain from competing over employees

 

The position of the General Director was given as part of her decision to close the case in the matter of ITTAA, Diesenhaus and Amsalem

The General Director of the Restrictive Trade Practices announced today (25.7.2018) her decision not to take enforcement measures against the Ethics Rules of the Israel Tourist & Travel Agents Association (ITTAA), which prohibited travel agencies from soliciting employees of competitors. The General Director's decision is because of a past representation by the Israeli Antitrust Authority (IAA) according to which the provisions of the Ethics Rules are consistent with the Antitrust Law.

At the same time, in the announcement to the parties regarding closing the case, the General Director clarifies that restraints between competing companies prohibiting competition over employees may violate the Antitrust Law. According to the General Director, in general, such restraints, whether within the framework of trade associations or as part of an arrangement between competitors, would justify taking enforcement measures against the infringers.

The decision was reached subsequent to the General Director's announcement on December 17, 2017, according to which she was considering issuing a determination and imposing monetary sanctions on the ITTAA, Amsalem Tours & Travel Ltd., Diesenhaus - B.T.C. Ltd. and their senior executives, for their involvement, each in its part, in establishing a prohibited course of action of a trade association and for acting in accordance with such. The Authority's announcement was based on actions taken by the ITTAA following complaints filed by Amsalem and Diesenhaus against a competing travel agency. The purpose of the complaints was to enforce the provisions of the Ethics Rules contained at that time in the ITTAA's bylaws, which prohibited soliciting employees of competitors.

The General Director's decision not to take enforcement measures stems from the fact that in 1991, when registering the ITTAA as an association in the Registrar of Associations, the IAA made a representation to the ITTAA that the Ethics Rules did not constitute a restrictive arrangement and that they could be included in the bylaws – and by implication, that they could also be followed.

Following the General Director's announcement regarding her intention to take enforcement measures and prior to her decision, there was a hearing for the parties, at the end of which the General Director decided that the special and exceptional circumstances favored not taking enforcement measures.