FTC and DOJ Announce Monitoring of Employer Coordination that Disadvantages Workers During COVID-19

The Bureau of Competition of the Federal Trade Commission (FTC) and Antitrust Division of the Department of Justice (DOJ) jointly released a statement announcing their focus on anticompetitive conduct in U.S. labor markets during the COVID-19 pandemic. While the agencies have recognized there are many pro-competitive ways in which businesses can collaborate to address the current crisis, they have made clear that they will not tolerate anticompetitive conduct that harms workers on the front lines, including doctors, nurses, first responders, and those who work in grocery stores and pharmacies.

The agencies’ announcement puts employers, staffing companies, and recruiters on notice that their efforts to enforce the antitrust laws will not be relaxed during COVID-19 crisis. The DOJ and FTC will be on alert for firms that engage in collusion or other anticompetitive conduct that harms workers. Examples of such conduct include agreements to suppress or eliminate competition with respect to compensation, benefits, hours worked, and other terms of employment, as well as the hiring, soliciting, recruiting, or retention of payroll and non-payroll workers. The explicit inclusion of non-payroll workers shows that employers must be cognizant of potential misbehavior that could impact employees and independent contractors alike. Companies and individuals involved in hiring and recruiting of workers who engage in anticompetitive conduct may be subject to criminal and/or civil liability.

By affirming the importance of competition and mobility in the workforce, the agencies are continuing their scrutiny of employment practices which violate the antitrust laws. In recent years, wage-fixing, no-poach arrangements, and certain noncompete agreements have received enhanced scrutiny from the DOJ and FTC.

At the same time, the DOJ and FTC recognize that there may be procompetitive collaborations between firms during COVID-19. The agencies have announced streamlined procedures to provide expedited guidance to companies who may wish to collaborate during the crisis.

Ballard Spahr’s Antitrust and Competition Group and Labor and Employment Group have experience counseling businesses in all markets regarding antitrust risk and employment practices.

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