US Antitrust Agencies Remind Parties That Collusion in Labor Markets Remains a Top Enforcement Priority

On April 13, 2020, the Antitrust Division of the US Department of Justice (DOJ) and the US Federal Trade Commission (FTC) issued the “Joint Antitrust Statement Regarding COVID-19 and Competition in Labor Markets” (the Joint Statement).[1] The Joint Statement reinforces, and is consistent with, prior statements that collaborative efforts aimed at improving the nation’s ability to combat COVID-19 and to protect the health of the US population will be given substantial latitude under the antitrust laws. But the Agencies also are keen to remind businesses that antitrust enforcement remains a high priority when it comes to collusion or information sharing that may harm workers.[2] The ongoing pandemic is not a justification for coordination on hiring, wages, benefits, layoffs, or other terms and conditions of employment.

The Joint Statement Repeats a Familiar Refrain

Repeating themes articulated in the DOJ/FTC’s “Antitrust Guidance for Human Resource Professionals,”[3] the Joint Statement says that the Agencies are “on alert” for “collusion or other anticompetitive conduct,” including “agreements to lower wages or reduce salaries or hours worked” particularly among essential employees, such as doctors, nurses, first responders, grocery store workers, or others who are “on the front lines of addressing the crisis.”[4] As the DOJ has done before, the Joint Statement threatens criminal prosecution for cartel-like agreements not to compete for labor.[5] And where criminal charges are not possible, the Agencies may bring civil challenges for conduct that could harm the labor markets.[6] Finally, as in the 2016 HR Guidance, the Joint Statement invites whistleblowers to report any potential violations directly to the agencies.[7]

Key Take-Aways

Although the Agencies announced their support of pro-competitive collaborations targeted at crisis recovery efforts, the Joint Statement reminds companies to tread carefully and provides several lessons for minimizing potential antitrust risks:

• Review antitrust compliance programs to ensure they are up to date. If your company employs “essential workers,” consider whether conditions warrant any additional guidance.
• Do not engage in discussions or exchanges of information relating to salaries, wages, employee-specific benefits, hours worked, or potential layoffs, etc., without first seeking advice of antitrust counsel. Such information should be exchanged only where necessary (i.e., as part of a contract negotiation) and only with people who are not in a position to make employment-related decisions at the company requesting the information.
• Do not enter into any agreement not to compete for labor or any agreement that may restrict the ability of an employee (particularly someone who is non-management) from seeking other employment.

[1] Dept. of Justice, Antitrust Division & Federal Trade Commission, “Joint Antitrust Statement Regarding COVID-19 and Competition in Labor Markets,” Apr. 13, 2020, https://www.ftc.gov/system/files/documents/advocacy_documents/joint-statement-bureau-competition-federal-trade-commission-antitrust-division-department-justice/statement_on_coronavirus_and_labor_competition_04132020_final.pdf.

[2] See “Trump Administration Continues Antitrust Focus on Employee Issues: Department of Justice Antitrust Division to Hold Workshop on Competition in Labor Markets,” August 12, 2019, by Mark Ryan, William Stallings, and Meytal McCoy, https://www.mayerbrown.com/en/perspectives-events/publications/2019/08/trump-administration-continues-antitrust-focus-on-employee-issues.

[3] See Dept. of Justice, Antitrust Division & Federal Trade Commission, “Antitrust Guidance for Human Resource Professionals,” Oct. 2016, https://www.justice.gov/atr/file/903511/download; see also “DOJ and FTC Guidane to HR Professionals Warns of Focus on Criminal Prosecution for Employment Agreements,” Dec. 1, 2016, by Mark Ryan, et al., https://www.mayerbrown.com/en/perspectives-events/publications/2016/12/doj-and-ftc-guidance-to-hr-professionals-warns-of.

[4] Joint Statement, n. 1.

[5] Id. To be clear, however, the DOJ has not yet brought a criminal case against either a company or an individual on the basis of an allegedly illegal agreement involving labor.

[6] Id.

[7] See Dept. of Justice, Antitrust Division & Federal Trade Commission, “Antitrust Guidance for Human Resource Professionals,” Oct. 2016, https://www.justice.gov/atr/file/903511/download; see also “DOJ and FTC Guidane to HR Professionals Warns of Focus on Criminal Prosecution for Employment Agreements,” Dec. 1, 2016, by Mark Ryan, et al., https://www.mayerbrown.com/en/perspectives-events/publications/2016/12/doj-and-ftc-guidance-to-hr-professionals-warns-of.

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