Civilised. Or even Civilized.
Since the agreement was not to *actively* recruit (i.e. poach, headhunt or cold call) each other's staff, then fair enough, surely?
Sounds like a very civilised and (dare I say it) gentlemanly arrangement, which does nothing to prevent the staff of either moving of their own volition from one firm to the other, and which also prevents enmity building up between the firms.
Surely you can't legislate to *force* companies to headhunt from each other?