Labor & Employment Law Daily Wrap Up, AGENCY NEWS—FTC and DOJ jointly issue antitrust guidelines for business activities affecting workers, (Jan 17, 2025)
By Peter Reap, J.D., LL.M.
The new guidelines replace 2016 Antitrust Guidance for Human Resource Professionals.
The FTC and the Department of Justice Antitrust Division have jointly issued Antitrust Guidelines for Business Activities Affecting Workers. The new guidelines explain how the Justice Department and FTC identify and assess the antitrust risks of business practices affecting workers and replace the 2016 Antitrust Guidance for Human Resource Professionals.
The guidelines provide examples and cite cases to explain how the agencies analyze business practices that may violate the antitrust laws, such as information sharing, restrictions on worker mobility, abuses of bargaining power and other restrictive, exclusionary or predatory employment conditions. The guidelines also explain that certain types of agreements between employers, such as wage-fixing or no-poach agreements, may expose companies and executives to criminal liability under the antitrust laws.
Contents of the guidelines. The guidelines are divided into 8 individual Sections. Sections 1–5 discuss specific types of agreements or business practices that may violate the antitrust laws. Certain agreements and other activities may give rise to criminal liability. Other types of agreements may be subject to civil liability rather than criminal prosecution.
Each of the first five sections addresses a particular type of agreement or practice:
Agreements between companies not to recruit, solicit, or hire workers, or to fix wages or terms of employment, may violate the antitrust laws and may expose companies and executives to criminal liability. Where appropriate, DOJ exercises its authority to bring felony criminal charges against companies and individuals who participate in these conspiracies.
Agreements in the franchise context not to poach, hire, or solicit employees of the franchisor or franchisees may violate the antitrust laws. No-poach and similar agreements are subject to antitrust scrutiny even if they are between a franchisor and a franchisee or, for example, among the franchisees of the same franchisor.
Exchanging competitively sensitive information with companies that compete for workers may violate the antitrust laws. This includes exchanges of information about compensation or other terms or conditions of employment, and other exchanges of information that harm competition for workers. Exchanging such information with competitors may be illegal even if companies use a third party or intermediary—including a third party using an algorithm—to share such information.
Employment agreements that restrict workers’ freedom to leave their job may violate the antitrust laws. These include non-compete provisions that prevent workers from leaving their job to join a competing or potentially competing employer; that prevent workers from leaving their job to start a new business; or that require workers to pay a penalty upon leaving their job.
Other restrictive, exclusionary, or predatory employment conditions that harm competition may violate the antitrust laws. These include overly broad non-disclosure agreements, training repayment agreement provisions, non-solicitation agreements, and exit fee or liquidated damages provisions.
Section 6 explains that the antitrust laws apply to relationships between businesses and independent contractors. For example, an agreement between businesses to fix the compensation that each pays to independent contractors may violate the antitrust laws, just as an agreement between businesses to fix the wages each pays to workers may violate the antitrust laws. Section 7 explains that false claims about workers’ potential earnings may violate federal laws against unfair, deceptive, or abusive practices. Section 8 provides information about reporting potential antitrust violations to the Agencies.
Mekki comments. “For more than a century, the antitrust laws have protected workers from unlawful schemes, abuses of bargaining power, and restrictions on their mobility,” said Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “The Antitrust Division will continue to work with its federal and state partners to ensure the economic freedom and opportunity of American workers and their families.”
Khan comments. "The antitrust laws protect all Americans, including workers, from illegal monopolization, collusion, and unfair methods of competition," said FTC Chair Lina M. Khan. “These antitrust guidelines provide clarity to businesses about the practices that can violate the law—from agreements between firms to fix workers’ wages to coercive noncompetes.”
Ferguson dissent, joined by Holyoak. In what has become a common refrain to many of the FTC actions over the past several days prior to the impending inauguration of President-elect Trump, FTC Commissioner Andrew N. Ferguson Joined by Commissioner Melissa Holyoak issued a sharply critical dissenting statement:
…the lame-duck Biden-Harris FTC should not replace existing guidance mere days before they hand over the baton. That is not “running through the tape.” Rather, the Biden-Harris FTC announcing its views on how to comply with the antitrust laws in the future is a senseless waste of Commission resources. The Biden-Harris FTC has no future.
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