July 21, 2022

US FTC Continues Focus on Gig Economy with NLRB Agreement


In its latest foray into labor practices, on July 19, 2022, the Federal Trade Commission (FTC) signed a memorandum of understanding (MOU) with the National Labor Relations Board (NLRB) allowing the agencies to share non-public information with each other to “protect workers against unfair methods of competition, unfair or deceptive acts or practices, and unfair labor practices.” The FTC’s press release explains that the MOU was intended to facilitate cooperation on “key issues such as labor market concentration, one-sided contract terms and labor developments in the ‘gig economy.’”

The MOU’s list of “areas of mutual interest” between the two agencies provides a rough roadmap of the agency’s top issues in this space:

  • The extent and impact of labor market concentration
  • The imposition of one-sided and restrictive contract provisions, such as noncompete and nondisclosure provisions
  • Labor market developments relating to the “gig economy” and other alternative work arrangements
  • Claims and disclosures about earnings and costs associated with gig and other work
  • The impact of algorithmic decision-making on workers
  • The ability of workers to act collectively
  • The classification and treatment of workers

The FTC has recently focused policy and enforcement resources on labor issues. Last year, the FTC held a joint event with the Department of Justice on “promoting competition in labor markets,” addressing the labor implications of mergers, contractual restraints that may impede mobility, information sharing among employers, and collective bargaining in the gig economy. The FTC also has taken steps to increase its ability to obtain money relief in connection with deceptive earnings claims, first by issuing a “Notice of Penalty Offense” concerning earnings claims (a new approach that the agency has not yet used in an enforcement action) and then beginning a rulemaking to prohibit deceptive earnings claims (which we explained in a prior Legal Update). Its enforcement has echoed these policy actions, with the agency imposing restrictions on worker noncompete agreements in merger cases and suing well-known gig-economy companies in connection with allegedly deceptive earnings claims (outlined in the MOU press release).

The MOU itself is similar to the FTC’s other inter-agency agreements. Reading much like a litigation protective order, the document explains how each agency will handle non-public information obtained from the other and imposes mutual obligations to keep data secure, among other things.

What does this mean? The MOU is a procedural tool and does not itself reflect a shift in the FTC’s policies or enforcement priorities. But companies should take note of the MOU’s “areas of mutual interest,” particularly companies in the gig economy or those contemplating a transaction that would trigger FTC review. The FTC appears to have these labor issues front-of-mind, which means company counsel should consider if they should as well.

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