DOJ and FTC Enter Separate MOUs with the NLRB to Collaborate on Worker Protections and Competition in U.S. Labor Markets

In the latest employment-related collaborations under President Biden, the U.S. Department of Justice Antitrust Division (“DOJ”) and Federal Trade Commission (“FTC”) both recently announced new partnerships with the National Labor Relations Board (“NLRB”), with the aim of coordinating their policy and enforcement initiatives to protect workers’ rights and promote competition in labor markets. The DOJ and FTC separately entered memoranda of understanding with the NLRB. While neither memoranda is legally binding or has the force of law, the new partnerships emphasize these agencies’ interest in collaborating on enforcement activities relating to certain competition and labor issues, especially as it relates to the promotion of employee mobility.

The FTC Memorandum of Understanding (“MOU”) (“FTC MOU”) identifies several areas of common interest to the agencies, including:

• the gig economy and other alternative work arrangements;

• one-sided and restrictive contract provisions, such as non-compete and non-disclosure clauses;
• labor market concentration effects on workers;
• algorithmic decision making related to employment and hiring decisions;
• collective action to organize workers; and
• independent contractor classification and treatment.

The DOJ and the NLRB acknowledge in the DOJ MOU that the agencies share a mutual interest in protecting workers from collusive or anticompetitive employer practices and unlawful interference with employees’ right to organize. The DOJ MOU creates a framework greater coordination in information sharing, enforcement activity, and training, including specific provisions calling for the NLRB to refer potential antitrust violations to the DOJ and for the DOJ to evaluate whether to open a civil or criminal investigation. Similarly, the DOJ MOU calls for the DOJ to provide information to employees affected by potential violations of the National Labor Relations Act (“NLRA”).

Potential Implications

Although the potential effects, if any, of these new partnerships remain to be seen, companies should be mindful of the potential for information sharing across agencies that could lead to increased independent or coordinated enforcement efforts. One area for potential collaboration is merger reviews. For example, information about company labor practices that the FTC routinely gathers from its review of potential company mergers, including workers’ wages and working conditions, hiring methods, and no-poach or non-solicit provisions in employment agreements, could be very useful information for the NLRB when it is investigating charges of unfair labor practices. Likewise, the FTC and DOJ may be able to obtain compliance and other data about company labor practices from the NLRB to inform their merger investigations.

More importantly, these partnerships highlight the increased regulatory focus on the intersection of antitrust and labor law. These partnerships advance the Biden administration’s Whole‑of‑Government approach to combating labor and competition issues, as outlined in the Executive Order issued in July 2021. These partnerships also underscore the DOJ’s and FTC’s heightened enforcement efforts in labor markets. The DOJ has brought a number of criminal indictments involving alleged wage fixing and no-poach agreements between employers, but has had limited success in prosecuting these cases to date. Over the past year, the FTC evaluated potential action related to employee non-compete agreements, including holding a two-day workshop with the DOJ in December 2021 to seek ways to address the increased use of restrictive covenants in labor agreements, information sharing among employers, and collective bargaining in the gig economy. FTC Chair Lina Khan recently told The Wall Street Journal that regulating employee non-compete agreements “falls squarely in [the FTC’s] wheelhouse” and confirmed that the FTC is considering issuing rules limiting the use of employee non-compete agreements.

The memoranda also continue the NLRB’s trend of coordinating with other agencies to further enforcement efforts. The NLRB previously announced a similar agreement with the U.S. Department of Labor’s Wage and Hour Division resolving to share information and coordinate investigations into wage theft and retaliation. Notably, the memoranda also mirror the agreement reached between the DOJ and the Department of Labor in March 2022 to “protect workers from employer collusion, ensure compliance with the labor laws and promote competitive labor markets and worker mobility.”