ICYMI* - The Federal Trade Commission's new Chairman created a "Joint Labor Task Force" to prioritize "investigations and prosecutions of deceptive, unfair, or anticompetitive labor market conduct and coordinating all such actions across the Bureaus, creating information-sharing protocols across the FTC's Bureaus and offices to exchange best practices for uncovering and investigating such conduct." The FTC also recently finalized a settlement that challenged clauses in a management agreement where residential and commercial building owners were limited from hiring building service workers who were employed by the management company. Under the settlement agreement, these clauses can no longer be enforced.
Similarly, the Antitrust Division at the Department of Justice launched an "Anticompetitive Regulations Task Force" to "advocate for the elimination of anticompetitive state and federal laws and regulations that undermine free market competition" across various industries, which would presumably include laws and regulations that restrict the movement of workers. The DOJ also recently secured its first criminal conviction in a wage-fixing lawsuit (https://www.bipc.com/doj-secures-first-criminal-antitrust-labor-market-conviction).
At the state level, the Governor of Colorado signed a bill into law on June 3 that revised the state's current non-compete law. The revised law prohibits non-compete agreements for physicians, advanced practice registered nurses, certified midwives, and dentists, with few exceptions, such as in connection with the sale of a business. It also includes a provision that essentially requires employers to allow these healthcare professionals to tell patients they are moving employers. Colorado is the latest state in the trend to limit the use of non-compete agreements, including through industry-specific bans (e.g., Arkansas, Louisiana, Maryland, and Pennsylvania) and salary thresholds (e.g., Illinois, Maine, Nevada, Virginia). Several states have introduced bills to completely ban non-compete agreements (e.g., Arizona, Illinois, Michigan). On the other hand, Florida recently passed a law making non-compete agreements presumptively valid.
We should be finding out more about whether the FTC will rescind the Rule Banning Non-Compete Agreements or pursue its appeals in mid to late July. But in the meantime, both federal and state regulators are taking a close look at the use of overbroad non-compete agreements and companies should keep up to date on individual challenges as well as state laws.
A healthy labor market is critical to the country's success. But deceptive, unfair, and anticompetitive labor practices are widespread.
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