On January 16, 2025, the U.S. Department of Justice (DOJ) and
the Federal Trade Commission (FTC) issued new Antitrust Guidelines for Business Activities
Affecting Workers (the Guidelines), replacing the agencies'
2016 Antitrust Guidance for Human Resource
Professionals (the 2016 HR Guidance). The Guidelines continue
DOJ's focus on no-poach, wage-fixing, and information-sharing
agreements and FTC's focus on non-compete agreements. However,
the Guidelines go beyond the 2016 HR Guidance by addressing
non-disclosure agreements, hiring restrictions in franchise
agreements, non-solicitation agreements with employees, training
repayment agreements, exit fee and liquidated damages agreements,
and false earnings claims.
Announced just days before President Donald Trump's
inauguration, the Guidelines drew dissents from Commissioner (and
incoming FTC Chair) Andrew Ferguson and Commissioner Melissa
Holyoak.1 However, Ferguson's dissent focused on the
timing of the Guidelines' issuance, and he reiterated that
"antitrust laws protect employees from unlawful restraints of
the labor markets."2 It is also worth noting that
DOJ actively pursued labor-market antitrust cases during the first
Trump administration, including bringing the first criminal cases
alleging criminal wage-fixing and no-poach agreements.3
Thus, it is not a given that the second Trump administration will
be more lenient on labor-market antitrust issues, particularly the
issues addressed in the 2016 HR Guidance. The fate of the new
issues raised in the Guidelines may be more uncertain.
According to the Guidelines, the following types of agreements or
business practices may violate the antitrust laws and potentially
trigger criminal or civil liability:
1. No-Poach and Wage-Fixing Agreements
No-poach: Agreements between businesses not to recruit,
solicit, hire, and/or otherwise compete for current, former, or
potential workers may violate antitrust laws. These no-poach
agreements need not completely prohibit hiring another
company's workers to violate the law. Any agreement to restrict
a company's ability to hire another company's workers, such
as an agreement not to "cold call" another company's
workers or to require permission from the current employer before
hiring an employee, may constitute an unlawful no-poach
agreement.4
Wage-fixing: Agreements between businesses concerning
workers' salaries or other terms of compensation, such as
bonuses, benefits, or other terms of employment, similarly may
violate antitrust laws. Any agreement to a range, ceiling, minimum,
or benchmark for calculating wages qualifies as a legally suspect
wage-fixing agreement. It does not matter whether the agreement is
informal, unwritten, unspoken, direct, or through a third party;
such agreements may be unlawful.
These issues were the focus of the 2016 HR Guidance, and the
Guidelines take a consistent approach. Importantly, despite
suffering setbacks at criminal trials following the 2016 HR
Guidance, the Guidelines reiterate that such agreements may be
subject to criminal liability. And as a per se offense, no
showing of actual harm (such as lower wages) is required to prove
an antitrust violation.
2. Franchise No-Poach Agreements
Agreements between franchisors and franchisees not to compete for workers can still be per se unlawful despite the existence of a vertical business relationship between them. Moreover, a franchisor may violate antitrust laws by organizing or enforcing a no-poach agreement among its franchisees. No-poach agreements between franchisor and franchisee, or between franchisees of the same franchisor, may also be prohibited by state law5 and have been a focus of recent antitrust litigation.6
3. Sharing Competitively Sensitive Information
Sharing competitively sensitive information with competitors
— such as terms and conditions of employment, compensation,
or benefits — may violate antitrust laws "when the
information exchange has, or is likely to have, an anticompetitive
effect."7 Companies need not directly
share competitively sensitive information to violate the law.
Sharing competitively sensitive information indirectly
through an intermediary, such as an algorithm, software program, or
a third party, may also be unlawful.
Information-sharing agreements that are ancillary to a broader
business collaboration and are "reasonably necessary to
achieve the procompetitive potential of that collaboration"
may require a "fuller analysis of their effects" before
being deemed unlawful.8 Unsurprisingly, the agencies
have taken a narrow view on this issue.[[N: Brief for the United
States of America and the Federal Trade Commission as Amici Curiae
in Support of Neither Party, Deslandes v. McDonald's USA
LLC, Nos. 1:17-cv-04857, 1:19-cv-05524 (7th Cir. 2023)
("[a] restraint does not qualify as ancillary merely because
it accompanies some other agreement that is itself lawful").
]] The new Guidelines, however, do not provide much guidance on
what types of ancillary agreements might be deemed reasonably
necessary to a legitimate collaboration and therefore lawful.
4. Non-Compete Clauses in Employment Contracts
Employment contracts that restrict workers from seeking
alternative employment or from starting a competing business may
also violate antitrust laws. DOJ has taken the position that an
employee non-compete may be a per se violation of the
Sherman Act where the employer and employee are potential
competitors.9 Consequently, in one corporate criminal
resolution, DOJ required the company to agree to release current
and former employees from non-compete
obligations.10
Similarly, FTC has taken the position that such agreements may
violate Section 5 of the FTC Act as an unfair method of competition
and has passed a rule prohibiting non-compete
agreements.11 Although enforcement of the rule has been
enjoined pending appellate review, FTC may continue to pursue
non-competes on a case-by-case basis.12 For example, FTC
has required merging parties to cease using, enforcing, or entering
into non-compete agreements.13
5. Other Employment Conditions That Create Enforcement Risk
The agencies warn that they may also scrutinize or take action against any agreements that "impede worker mobility or otherwise undermine competition."14 The wide scope for potential liability includes:
- Employee non-disclosure agreements
- Training repayment agreements
- Non-solicitation agreements with employees
- Exit fee and liquidated damages agreements
- False earnings claims by employers
These activities historically have not given rise to antitrust liability. Accordingly, while the legality of such agreements is ultimately fact-specific, any agreement that discourages workers from seeking or accepting other work or starting a business may draw scrutiny under the Guidelines.
Guidelines Also Apply to Independent Contractors
The Guidelines state that the laws prohibiting anticompetitive conduct directed at workers also apply to independent contractors. Interestingly, this guidance comes two days after FTC issued a policy statement stating that "independent contractors, including gig workers, are shielded from antitrust liability when engaging in protected bargaining and organizing activities — such as seeking better compensation and job conditions." Taken together, the Guidelines and the FTC's policy statement suggest that independent contractors acting collectively may be shielded from antitrust liability, but those who employ them are not.
Takeaways
- Companies should update compliance programs to include training and education on the types of activities covered by the Guidelines.
- Companies should review form or template agreements, including employment contracts, severance agreements, and franchise or vendor agreements, that may contain provisions subject to the Guidelines.
- Companies should remain alert to decisions by the new Trump administration to modify the agencies' approach to the Guidelines.
Footnotes
1. Andrew N. Ferguson, Dissenting Statement of Commissioner Andrew N. Ferguson Joined by Commissioner Melissa Holyoak Regarding the Antitrust Guidelines for Business Activities affecting Workers, Matter Number P251202 (Jan. 16, 2025).
2. Andrew N. Ferguson, Dissenting Statement of Commissioner Andrew N. Ferguson Joined by Commissioner Melissa Holyoak Regarding the Antitrust Guidelines for Business Activities affecting Workers, Matter Number P251202 (Jan. 16, 2025).
3. See, e.g., United States v. Surgical Care Affiliates, LLC, No. 3:21-cr-00011 (N.D. Tex. Jan. 5, 2021) (alleging non-solicitation agreements among competing healthcare companies in Texas and Colorado); United States v. Jindal, Case No. 4:20-CR-358 (E.D. Tex. Dec. 09, 2020) (alleging a wage-fixing agreement among physical-therapy staffing companies in Texas).
4. Antitrust Guidelines for Business Activities Affecting Workers, Jan. 16, 2025, at fn 11; see also In re High-Tech Emp. Antitrust Litig., 856 F. Supp. 2d 1103, 1122 (N.D. Cal. 2012).
5. See, e.g., Wash. Rev. Code Ann. § 49.62.060 ("No franchisor may restrict, restrain, or prohibit in any way a franchisee from soliciting or hiring any worker of a franchisee of the same franchisor."); Minn. Stat. Ann. § 181.99.
6. See, e.g., Deslandes v. McDonald's USA LLC, No. 22-2333 (7th Cir. 2023).
7. Antitrust Guidelines for Business Activities Affecting Workers, Jan. 16, 2025, at 6.
8. Antitrust Guidelines for Business Activities Affecting Workers, Jan. 16, 2025, at fn 15.
9. Stmt. of Interest, Beck v. Pickert Medical Grp., No. CV21-02092, Nev. Second Judicial District Court (Feb. 25, 2022).
10. Deferred Prosecution Agreement, United States v. Fla. Cancer Specialists & Rsch. Inst., LLC, No. 2:20-cr-00078-TPB-MRM (M.D. Fla. Apr. 30, 2020).
11. Non-Compete Clause Rule, 89 Fed. Reg. 38342 (May 7, 2024).
12. See, e.g., Decision and Order, In Re Anchor Glass Container Corporation, et al., No. C-4793 (F.T.C. June 2, 2023); Decision and Order, In Re O-I Glass, Inc., No. 211-0182 (F.T.C. Feb. 23, 2023).
13. Decision and Order, In the Matter of Zimmer Holdings, Inc., No. C-4534 (F.T.C. Aug. 11, 2015); Decision and Order at 12–14, In the Matter of Davita Inc. and Total Renal Care, Inc., No. C-4752 (F.T.C. Jan. 10, 2022).
14. Antitrust Guidelines for Business Activities Affecting Workers, Jan. 16, 2025, at 9.
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