On July 19, 2022, the Federal Commerce Fee (FTC) and the Nationwide Labor Relations Board (NLRB) introduced they had been becoming a member of forces to “bolster the FTC’s efforts to guard staff by selling aggressive U.S. labor markets and placing an finish to unfair practices that hurt staff.“1 A memorandum of understanding (MOU) reached between the 2 businesses outlines the methods they’ll work collectively going ahead on labor points. The brand new effort is simply the newest instance of the U.S. antitrust businesses’ aggressive agenda to police antitrust violations in labor markets.
The important thing takeaways from the MOU are twofold:
- The FTC and the NLRB agreed upon a number of “problems with frequent regulatory curiosity,“ together with labor market developments referring to the “gig economic system,“ the imposition of restrictive covenants (similar to noncompetes), staff’ potential to behave collectively, and employee classification.2
- The businesses will cooperate by a) participating in data sharing and cross-agency consultations for regulation enforcement functions, b) cross-agency coaching to teach every company’s personnel concerning the different’s legal guidelines and laws, and c) coordinated outreach and schooling.3
In its announcement, the FTC mentioned that the settlement “is a part of a broader FTC initiative to make use of the company’s full authority, together with enforcement actions and Fee rulemaking, to guard staff.“4 Certainly, the company has beforehand introduced it’s factoring in “extra sides“ of competitors in its merger opinions, together with “how a proposed merger is affecting labor markets.“5 Latest Second Requests have required events to supply paperwork and data relating to the events’ efforts to compete for workers, and the FTC and the Division of Justice (DOJ) have collectively indicated their intention to deal with labor market points in future revisions to the Horizontal Merger Pointers.6 Outdoors of the merger context, the FTC has held public workshops to discover the authorized and financial bases for a possible rulemaking to limit using noncompete clauses.7
The FTC’s initiative is a part of a broader Biden Administration effort to prioritize antitrust enforcement in labor markets. President Biden’s July 2021 Government Order on competitors tasked the U.S. Treasury Division, together with the U.S. Division of Labor, the DOJ, and the FTC, to analyze “the results of lack of competitors on labor markets.“8 The Treasury report, revealed in March 2022, summarized educational analysis discovering that the lower in wages because of labor market energy was “roughly 20 % relative to the extent in a completely aggressive market.“9 The DOJ has additionally taken steps to extend enforcement in labor markets. It has introduced a variety of felony indictments towards alleged wage-fixing and no-poach agreements, although its report at trial has been underwhelming. In April 2022, two DOJ felony trials towards wage-fixing and no-poach agreements resulted in acquittals for all alleged conduct round hiring (although a defendant in one of many circumstances was discovered responsible of obstruction of justice).10 The DOJ claims it’s undeterred by these defeats, and has a number of different felony circumstances pending that allege labor market antitrust violations.11
The MOU between the FTC and the NLRB is one other knowledge level that the U.S. antitrust businesses proceed to place labor markets on the prime of their coverage and enforcement agenda. Whereas these efforts are nonetheless in flux, firms ought to take care to keep away from even the looks of no-poach or wage-fixing agreements with different firms and needs to be considered of their use of restrictive covenants similar to noncompete clauses. Additional, firms contemplating mergers and acquisitions ought to consider potential results on labor markets when assessing deal danger.
For extra data, please contact Scott Sher, Jamillia Ferris, Michelle Yost Hale, Mark Rosman, Jeff VanHooreweghe, or one other member of the agency’s antitrust and competitors follow.
 Press Launch, Federal Commerce Fee, “Federal Commerce Fee, Nationwide Labor Relations Board Forge New Partnership to Defend Employees from Anticompetitive, Unfair, and Misleading Practices” (July 19, 2022), out there at https://www.ftc.gov/news-events/information/press-releases/2022/07/federal-trade-commission-national-labor-relations-board-forge-new-partnership-protect-workers?utm_source=govdelivery.
 Memorandum of Understanding Between the Federal Commerce Fee (FTC) and Nationwide Labor Relations Board (NLRB) Relating to Info Sharing, Cross-Company Coaching, and Outreach in Areas of Frequent Regulatory Curiosity (July 19, 2022), https://www.ftc.gov/system/recordsdata/ftc_gov/pdf/ftcnlrbpercent20moupercent2071922.pdf (MOU), at § 3.
 MOU at § 4.
 Press Launch, Federal Commerce Fee, “Making the Second Request Course of Each Extra Streamlined and Extra Rigorous Throughout this Unprecedented Merger Wave” (Sept. 28, 2021), out there at https://www.ftc.gov/enforcement/competition-matters/2021/09/making-second-request-process-both-more-streamlined-more-rigorous-during-unprecedented-merger-wave.
 Press Launch, Federal Commerce Fee, “Federal Commerce Fee and Justice Division Search to Strengthen Enforcement Towards Unlawful Mergers” (Jan. 18, 2022), out there at https://www.ftc.gov/news-events/information/press-releases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcement-against-illegal-mergers.
 Press Launch, Federal Commerce Fee, “Non-Competes within the Office: Analyzing Antitrust and Client Safety Points” (Jan. 9, 2020), out there at Picture https://www.ftc.gov/news-events/occasions/2020/01/non-competes-workplace-examining-antitrust-consumer-protection-issues.
 Government Order on Selling Competitors within the American Economic system, The White Home, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/.
 Treasury Dep’t, “The State of Labor Market Competitors” (March 7, 2022), out there at https://dwelling.treasury.gov/system/recordsdata/136/State-of-Labor-Market-Competitors-2022.pdf.
 “First DOJ Felony Wage-Fixing and No-Poach Trials Finish in Acquittals,” Wilson Sonsini Consumer Alert, https://www.wsgr.com/en/insights/first-doj-criminal-wage-fixing-and-no-poach-trials-end-in-acquittals.html.