Title insurance giant Old Republic International will pay $1 million to settle charges that it entered into “no-poach” agreements to stifle labor competition, the New York Attorney General’s Office said late last week.
“For years, Old Republic stifled competition in the labor market, but this agreement ends the company’s illegal conduct, while putting all businesses on notice that no-poach agreements will not be tolerated in New York State,” New York Attorney General Letitia James said in a press release. “My office will continue to investigate no-poach agreements that potentially harm New York workers, and fight to end these anticompetitive practices once and for all.”
Old Republic issues title insurance policies in two ways: it underwrites policies from independent title insurance agencies, and it also has its own title insurance agencies, which compete with the independents. Think of it like a mortgage lender having wholesale and retail channels. Direct business is typically more profitable, since Old Republic does not have to split its premium with independent title insurance agencies. In New York, independents’ share of the premium is approximately 85%.
In a “normal market,” companies compete by offering higher wages or enhanced benefits to attract talent, the AG said. No-poach agreements undermine competition and disrupt the normal compensation-setting mechanisms, harming the labor market, the AG said.
The settlement requires Old Republic to notify the attorney general’s office if it learns of any effort by a competitor to enter or enforce a no-poach agreement at any time in the next decade. The company also agreed to pay $50,000 per month “for each and every such default in the performance of any obligation” under the agreement that occurs after the effective settlement date.
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Old Republic is among the biggest title insurance companies in the U.S. Nationally, it’s third in market share, behind Fidelity and First American but ahead of Stewart.
State regulators have targeted the title insurance industry since early 2015, when the state Department of Financial Services took several actions, including banning firms from treating clients to meals and entertainment (in some cases, title agents tried to gin up business by taking clients to sports events, expensive dinners and even strip clubs). The New York State Land Title Association challenged the ruling. The regulations were annulled and reinstated multiple times over the next few years.