On January 16, 2025, the Antitrust Division of the Department of Justice and the Federal Trade Commission jointly issued new guidance for employment practices that impact workers. As detailed below, the Antitrust Guidelines for Business Activities Affecting Workers touch on various employment areas, including no-poach and non-solicit agreements with other employers, exchanging wage information with other employers, employee non-compete provisions, and employee non-disclosure agreements. Unfortunately, with few exceptions, the document sheds little light as to what may cause the agencies to declare an employment provision unlawful, or guidelines for how employers should navigate these issues. Instead, the document previews several areas in the employment context that may draw scrutiny from the DOJ and the FTC.
Potential Criminal Exposure: Since 2021, the Antitrust Division has brought several criminal actions in the employment space against companies and individuals for no-poach agreements, non-solicitation agreements, and wage fixing. These actions followed the DOJ’s and FTC’s 2016 Antitrust Guidance for Human Resource Professionals, which announced the DOJ’s intentions to prosecute such cases criminally. The new Guidelines formally replace the 2016 guidance but reiterate the agencies’ view that “[b]usinesses that compete with each other for workers may be committing an antitrust crime if they enter into an agreement not to recruit, solicit, or hire workers or to fix wages or terms of employment.” The Guidelines explain the breadth of agreements that could create criminal exposure, including unwritten, informal, or unspoken agreements, and agreements that do not completely prohibit hiring another company’s workers, as with an agreement not to “cold call” employees. In addition, the Guidelines explain that criminal wage-fixing claims may be brought in the case of agreements regarding any type or form of compensation, such as benefits, or even in the case of an agreement to use fixed starting points or ranges for compensation. The Guidelines also note that these agreements may be equally illegal if imposed in the franchisor context.
Sharing of Information: The Guidelines state that the antitrust laws may be violated if employers share “information about compensation or other terms or conditions of employment,” and even if it is exchanged through a third party. This would include information relating to compensation, benefits, or the terms of an employment contract. This scenario may arise in any number of ways, such as gatherings at which senior officers of businesses within the same industry meet to discuss industry trends.
The Guidelines also touch on the use of algorithms in the wage- or benefit-setting context, noting that the use of an algorithm or other software may be unlawful if it uses data from other employers to generate recommendations, even if the employer is not required to accept the recommendations. These statements comport with the positions taken by the DOJ as a party or as amicus in a number of recent cases, but the Guidelines omit any concrete information about what type of information may or may not be problematic to share.
Non-Compete Clauses: The Guidelines warn that “[n]on-compete clauses that restrict workers from switching jobs or starting a competing business can violate the antitrust laws.” Unfortunately, the Guidelines do not explain what type of non-compete clauses may be problematic, and instead point to prior enforcement actions as examples.
Non-Disclosure Agreements: Similarly to the agencies’ concern over non-compete clauses, the Guidelines explain their view that non-disclosure agreements may be unlawful “when they span such a large scope of information that they function to prevent workers from seeking or accepting other work or starting a business after they leave their job.” Specifically, it cites as an example a non-disclosure agreement “that prohibit[s] disclosure of any information that is ‘usable in’ or ‘relates to’ an industry.”
The Guidelines also caution against non-disclosure agreements that may suggest an employee cannot report antitrust violations or cooperate with a government investigation. This warning is consistent with a joint statement issued by the DOJ and OSHA two days ago, suggesting such non-disclosure agreements may run afoul of the Criminal Antitrust Anti-Retaliation Act of 2019.
Other Conditions of Employment: The Guidelines also explain the agencies’ view that training repayment agreement provisions, non-solicitation agreements with employees, exit fees, and liquidation provisions may violate the antitrust laws if they prevent workers from working for another employer or starting a new business. Again, however, the Guidelines offer no further guidance on this point.
False Earnings Claims: The Guidelines conclude with a reminder to employers that the FTC has taken actions against companies “for allegedly falsely advertising that workers would earn substantially more in compensation and/or tips than they did in reality.”
Time will tell whether employers see an uptick in DOJ and FTC enforcement of the issues mentioned above. But if the Guidelines are any harbinger of things to come, employers can expect enhanced scrutiny of their no-poach agreements, non-solicitation agreements, non-compete agreements, non-disclosure agreements, and the exchange of compensation information among industry partners.
