The FTC and DOJ have updated 2016 antitrust guidelines regarding antitrust issues implicated by certain kinds of agreements impacting employees and labor markets.
Businesses and their HR personnel need to understand that the new guidelines are a source of explanation concerning how certain agreements which limit the ability and freedom of workers to change jobs, or which amount to collusive combinations with other businesses to dictate hiring and compensation terms and conditions, can create both civil and criminal liability under the antitrust laws.
In sum, the kinds of agreements discussed in the new guidelines need to be avoided given the risk of serious liability consequences both monetary and potential imprisonment.
NEW GUIDELINES
On January 16, 2025, the FTC and DOJ jointly issued Antitrust Guidelines for Business Activities Affecting Workers (“2025 Guidelines”) replacing the 2016 jointly issued Antitrust Guidance for Human Resources Professionals (“2016 Guidelines”). The essential two-prong focus of the 2016 Guidelines on employer’s agreeing not to recruit certain employees or not to compete on terms of compensation has been expanded in the 2025 guidelines, which set forth a broader range of collusive activity between businesses to be under the antitrust enforcement microscope. At the end of the day, however, the bottom line is the same: agreements which limit mobility of workers and businesses in labor markets can create civil and criminal antitrust violations.
The 2025 Guidelines set out five (5) very specific examples of enforcement focus, and the list is clearly labeled as non-exhaustive:
- Agreements not to recruit, solicit or hire workers, or to fix wages or terms of employment.
- Franchise agreements which contain agreements not to poach, hire, or solicit employees of the franchisor or franchisee.
- Exchanges of competitively sensitive information between companies that compete for workers.
- Terms of employment agreements which restrict worker freedom to leave a job.
- Other “restrictive, exclusionary or predatory” terms of employment that “harm competition.”
The 2025 Guidelines then stress that “agreement” does not require a writing or other explicit evidence – “conspiracies, gentlemen’s agreements, handshake agreements, or shared or mutual understandings” can all violate the antitrust laws – whether express or implied and whether “talked about at all” and “even if they are never carried out.” That is a very classic Sherman Act section 1 “per se” view – it is the fact of the agreement that violates the law, and what happens after the agreement is made does not change things.
In thinking through the five (5) examples given, it is important to keep in mind that the competition market involved in these guidelines is the labor market – not the competition for sales or customers. Businesses which do not compete with each other as to industry may still need the same kind of worker – like an engineer or IT professional. Limiting their mobility via agreements not to compete for their talents or terms of employment which make it hard if not impossible to change jobs are looked at through the same antitrust lens.
The 2025 Guidance provides not only a fairly thorough set of narrative discussions about the five (5) examples – it also provides fairly extensive citation to case law and other matters which illustrate the points being made. In addition, the 2025 Guidance adds two other items to the focal list:
- Agreements reached between businesses and independent contractors.
- False claims about potential earnings.
In the discussion of independent contractor issues, the 2025 Guidelines specifically mention “platform businesses” such as smartphone apps where businesses hire independent contractors and not employees. If two businesses in need of independent contract workers agree to fix the compensation of those workers who offer their services via the platforms “may constitute the type of per se violation of the antitrust laws that the (sic) exposes the platforms to criminal liability.”
As to the “false claims” example, the 2025 Guidelines note that the FTC has taken actions against at least four (4) different businesses for “allegedly advertising that workers would earn substantially more in compensation and/or tips” than they actually did. The FTC believes that the antitrust issue implicated in the created inability of honest businesses to fairly compete for workers who take jobs based on such false promises. The businesses in the examples include Amazon, Uber and Grubhub.
Finally, in section 8 of the 2025 Guidelines, a how-to-report-violations catalog of methods is presented, online and via mail, as is a list of the type of information the agencies would like to see in those complaints. The desired information is what one would expect – names of businesses, individuals, examples of anticompetitive conduct, who may have been harmed and how the complainant came to learn the reported information.
CONCLUSION
In reality, there is nothing earth-shattering as a matter of substantive antitrust law in the 2025 Guidelines – but there is clearly an expanded lens of scrutiny being laid out by the enforcement agencies based on both the experience in enforcement activity under the 2016 Guidelines and the prosecutions and enforcement actions taken in the last several years regarding potential anticompetitive activities involving or impacting freedom in labor markets. Protecting worker freedom was a hallmark focus of the Biden Administration, but these new guidelines were passed on only a 3-2 vote. How they fare as an enforcement priority as the second Trump Administration takes shape remains to be seen, but clients and their HR professionals would be wise to understand that no matter what the political winds might bring, the fact of the matter is that many of these activities can trigger criminal prosecution and the very serious consequences attached to criminal liability under the antitrust laws. These kinds of agreements are not worth the risk from either a criminal or civil perspective.
