In the latest employment-related collaborations under
President Biden, the U.S. Department of Justice Antitrust Division
("DOJ") and Federal Trade Commission ("FTC")
both recently announced new partnerships with the National Labor
Relations Board ("NLRB"), with the aim of coordinating
their policy and enforcement initiatives to protect workers'
rights and promote competition in labor markets. The DOJ and FTC
separately entered memoranda of understanding with the NLRB. While
neither of the memoranda is legally binding or has the force of
law, the new partnerships emphasize these agencies' interest in
collaborating enforcement activities relating to certain
competition and labor issues, especially as it relates to the
promotion of employee mobility.
The FTC Memorandum of Understanding ("MOU")
("FTC MOU") identifies several areas of common interest
to the agencies, including:
- the gig economy and other alternative work arrangements;
- one-sided and restrictive contract provisions, such as non-compete and non-disclosure clauses;
- labor market concentration effects on workers;
- algorithmic decision making related to employment and hiring decisions;
- collective action to organize workers; and
- independent contractor classification and treatment.
The FTC MOU also envisions that the FTC and the NLRB will
share information cross-agency through consultations, cross-agency
training, and coordinated outreach.
Similar to the FTC MOU, the DOJ MOU describes that the DOJ and the NLRB
share a mutual interest in protecting workers from collusive or
anticompetitive employer practices and unlawful interference with
employees' right to organize. Specifically, the DOJ MOU
envisions greater coordination in information sharing, enforcement
activity, and training. This includes specific provisions calling
for the NLRB to refer potential antitrust violations to the DOJ and
for the DOJ to evaluate whether to open a civil or criminal
investigation. Similarly, the DOJ MOU calls for the DOJ to provide
information to employees affected by potential violations of the
National Labor Relations Act ("NLRA").
Potential Implications
Although the potential effects, if any, of these new
partnerships remain to be seen, companies should be mindful of the
potential to share information across agencies that could lead to
independent or coordinated enforcement efforts. One area for
potential cross-collaboration is merger reviews. For example,
information about company labor practices that the FTC routinely
gathers from its review of potential company mergers, including
workers' wages and working conditions, hiring methods, and
no-poach or non-solicit provisions in employment agreements, could
be very useful information for the NLRB when it is handling unfair
labor practice charges. Likewise, the FTC and DOJ may be able to
obtain compliance and other data about company labor practices from
the NLRB to inform their merger resolutions.
More importantly, these partnerships highlight the increased
regulatory focus on the intersection of antitrust and labor law.
These partnerships advance the Biden administration's
Whole-of-Government approach to combating labor and competition
issues, as outlined in the Executive Order issued in July 2021. These
partnerships also underscore the DOJ's and FTC's heightened
enforcement efforts in labor markets. The DOJ has brought a number
of criminal indictments involving alleged wage fixing and no-poach
agreements between employers, but with limited success in
prosecuting these cases to date. Over the past year, the FTC
evaluated potential action related to employee non-compete
agreements, including holding a two-day workshop with the DOJ in December 2021
to seek ways to address the increased use of restrictive covenants
in labor agreements, information sharing among employers, and
collective bargaining in the gig economy. FTC Chair Lina Khan
recently told The Wall Street Journal that regulating
employee non-compete agreements "falls squarely in [the
FTC's] wheelhouse" and confirmed that the FTC is
considering issuing rules limiting the use of employee non-compete
agreements.
The memoranda also continue the NLRB's trend of coordinating with other agencies to further
enforcement efforts. The NLRB previously announced a similar agreement with the U.S.
Department of Labor's Wage and Hour Division resolving to share
information and coordinate investigations into wage theft and
retaliation. Notably, the memoranda also mirror the agreement reached between the DOJ and the
Department of Labor in March 2022 to "protect workers from
employer collusion, ensure compliance with the labor laws and
promote competitive labor markets and worker mobility."
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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