Understanding the New Antitrust Guidelines: What Employers Need to Know About Worker Protections

The Department of Justice (DOJ) and Federal Trade Commission (FTC) recently issued updated “Antitrust Guidelines for Business Activities Affecting Workers,” which outline several business practices that may violate antitrust laws. These guidelines follow a recent federal court decision striking down the FTC’s final rule prohibiting nearly all non-competition agreements in the workplace. The guidelines identify seven actions that may violate antitrust laws, as follows:
- No-Poach and Wage-Fixing Agreements: Companies that agree not to recruit, solicit, or hire each other’s workers, or that fix wages or employment terms, may face criminal liability. The DOJ may bring felony charges against such conspiracies.
- Franchise No-Poach Agreements: Agreements within franchise systems that prevent hiring or soliciting employees between franchisors and franchisees, or among franchisees, are subject to antitrust scrutiny and may be illegal.
- Information Exchanges: Sharing competitively sensitive information, such as compensation details, between companies competing for the same workers can violate antitrust laws—even if facilitated through a third party or algorithm.
- Restrictive Employment Agreements: Employment contracts that limit workers’ ability to leave their jobs, including non-compete clauses, may be unlawful. These restrictions can prevent workers from joining competitors, starting new businesses, or impose penalties for leaving.
- Other Restrictive Employment Conditions: Overly broad non-disclosure agreements, training repayment provisions, non-solicitation agreements, and exit fee or liquidated damages clauses that harm competition may also violate antitrust laws.
- Application to Independent Contractors: Antitrust laws apply to relationships between businesses and independent contractors. For example, agreements between businesses to fix compensation for independent contractors may be illegal, similar to agreements concerning traditional employees.
- Collective Bargaining and Organizing Activities: The guidelines clarify that independent contractors and gig workers are protected from antitrust liability when engaging in collective bargaining and organizing activities aimed at improving compensation and working conditions. Such activities are exempt under antitrust statutes.
These guidelines emphasize the importance of maintaining competitive labor markets to ensure fair wages and working conditions for all workers. However, it remains to be seen whether the FTC will continue its current stance on restrictive employment agreements in light of the change in administration. For now, employers should be mindful of these guidelines and the FTC’s position that it can—and will—address these issues through case-by-case enforcement actions under the FTC Act.