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Can I contact other local organizations in my area to get a gauge on merit projections or other compensation and benefits data?

Asking other employers or organizations to share compensation or benefits information would seem harmless in nature. However, the potential result could lead to cost-fixing or salary-fixing from one organization to another and create liability for an employer. Conducting this type of comparison shopping goes against the provisions of the Sherman Antitrust Act of 1890. Congress passed the Sherman Act to protect trade and commerce against unlawful restraints and monopolies. The act prohibits unreasonable restraint of trade to include the potential to set compensation and benefits provided to employees. See Antitrust Laws.

According to the Federal Trade Commission, "The penalties for violating the Sherman Act can be severe. Although most enforcement actions are civil, the Sherman Act is also a criminal law, and individuals and businesses that violate it may be prosecuted by the Department of Justice. Criminal prosecutions are typically limited to intentional and clear violations such as when competitors fix prices or rig bids. The Sherman Act imposes criminal penalties of up to $100 million for a corporation and $1 million for an individual, along with up to 10 years in prison. Under federal law, the maximum fine may be increased to twice the amount the conspirators gained from the illegal acts or twice the money lost by the victims of the crime, if either of those amounts is over $100 million."

However, employers often want to be competitive in pricing positions and they have a strong desire to know what others are doing. The best practice is to seek resources that have been compiled outside of the employer's organization to minimize any evidence supporting antitrust violations. Courts look at intent or reasons behind information sharing. Also considered by courts are the nature, type, timeliness, means and method of sharing information. Using information secured from a vendor that is in writing, that uses averaged pay rates and aggregate data, that is based on information received from various sources, and that does not directly identify survey participants is in the best interest of the organization. 


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