U.S. Labor Markets: FTC and DOJ On High Alert For Employer Collusion

While building on their prior joint statement regarding competitors collaborating in responding to COVID-19 and its impacts, on April 13^th, the U.S. Federal Trade Commission (FTC) and the U.S. Antitrust Division of the Department of Justice (DOJ) (collectively, the Agencies) issued a joint statement reminding the business community that “they are on alert for collusion in U.S. labor markets” and that any such employer collusion that harms workers will never be tolerated, especially during the current pandemic.

Companies — including employers, staffing companies, and recruiters —  should take heed as this statement is an emphatic reminder that COVID-19 does not provide a rationale to legitimize anticompetitive agreements among competitors as it relates to the workforce. This would include any improper agreements to lower wages, reduce salaries, or adjust hours worked. The Agencies are particularly concerned with anticompetitive conduct that harms workers on the front lines of the COVID-19 response, including “doctors, nurses, first responders, and those who work in grocery stores, pharmacies, and warehouses, among other essential service providers.”

Specifically, companies and individuals involved in hiring, recruiting, retaining, or placing employees on the front lines of the COVID-19 response must be aware that the Agencies are actively monitoring for any violations in the labor market. Such anticompetitive conduct could include:

• Wage fixing;
• Floors, caps or other requirements on hours worked;
• No-hire agreements;
• Alignment of benefits provided;
• Noncompete agreements; and
• Improperly exchanging competitively sensitive information, including salary, wages, benefits and compensation data.

Recall, however, that there is a wide range of acceptable collaborations that competitors may undertake in response to the current pandemic and beyond. Goodwin’s antitrust team regularly counsels companies on how to maintain compliance with U.S. antitrust laws and we stand ready to advise you as your company responds to COVID-19 and its impacts.

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Please visit Goodwin’s Coronavirus Knowledge Center, where lawyers from across Goodwin are issuing new guidance and insights to help clients fully understand and assess the ramifications of COVID-19 and navigate the potential effects of the outbreak on their businesses.