The joint statement recognizes that while the COVID-19 pandemic offers businesses an opportunity for procompetitive collaboration and benefits, it also increases significant risk of anticompetitive conduct in the labor market. Here are some issues and factors that businesses should consider to mitigate antitrust risk as the Antitrust Division and Federal Trade Commission continue to consider enforcement actions for antitrust violations.
Since October 2016, the Antitrust Division of the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) have issued a series of joint and other statements concerning the enforcement of the antitrust laws on labor market issues. The two federal agencies have focused in particular on enforcement actions involving no poach agreements, wage fixing, and the sharing of sensitive information with competitors.
As part of their ongoing focus on labor market issues, the two agencies issued a Joint Antitrust Statement Regarding COVID-19 and Competition in Labor Markets on Monday. The statement recognizes that while there may be some procompetitive benefits from companies collaborating on coronavirus (COVID-19), such collaborative activity can give rise to a risk of anticompetitive conduct. In particular:
The Agencies are on alert for employers, staffing companies (including medical travel and locum agencies), and recruiters, among others, who engage in collusion or other anticompetitive conduct in labor markets, such as agreements to lower wages or to reduce salaries or hours worked. For years, the Agencies have challenged unlawful wage-fixing and no-poach agreements, anticompetitive non-compete agreements, and the unlawful exchange of competitively sensitive employee information, including salary, wages, benefits, and compensation data. Moreover, the [Antitrust] Division may criminally prosecute companies and individuals who enter into naked wage-fixing and no-poach agreements. Even absent a collusive agreement, the Bureau [of Competition of the Federal Trade Commission] may pursue a civil enforcement action against companies and individuals that invite others to collude. The Agencies may also use their civil enforcement authority to challenge unilateral anticompetitive conduct by employers that harms competition in a labor market (monopsony power). Companies and individuals involved in the hiring, recruiting, retention, or placement of workers should be aware that anticompetitive conduct runs the risk of civil and/or criminal liability.
Although many individuals and businesses have demonstrated extraordinary compassion and flexibility in responding to COVID-19, and will continue to do so, others may use it as an opportunity to prey on American workers by subverting competition in labor markets. The Division and the Bureau will not hesitate to hold accountable those who do so.
In order to mitigate potential antitrust risk, companies should consider the following issues and implement appropriate safeguards:
The latest joint statement by DOJ and the FTC serves as yet another warning that the antitrust enforcers continue to monitor the labor market for potential antitrust violations. In January, Assistant Attorney General Makin Delrahim stated that the Antitrust Division “separately expects to bring its first-ever criminal case accusing employers of colluding not to poach each other’s workers.” Congress is also focused on the issue including recent hearings held last October. We have been actively monitoring these developments in a series of LawFlashes and assisting clients on these antitrust issues, and will continue to provide updates based on further developments.
For our clients, we have formed a multidisciplinary Coronavirus COVID-19 Task Force to help guide you through the broad scope of legal issues brought on by this public health challenge. We also have launched a resource page to help keep you on top of developments as they unfold. If you would like to receive a daily digest of all new updates to the page, please subscribe now to receive our COVID-19 alerts.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Silicon Valley/Washington, DC
Mark L. Krotoski
Daniel S. Savrin
 See, e.g., Press Release, US Dep’t of Justice, Justice Department and Federal Trade Commission Release Guidance for Human Resource Professionals on How Antitrust Law Applies to Employee Hiring and Compensation (Oct. 20, 2016); see also LawFlash: FTC and DOJ Issue Antitrust Guidance for HR Professionals (Nov. 1, 2016).
 Joint Statement, US Dep’t of Justice, Federal Trade Comm’n, Antitrust Guidance for Human Resource Professionals (Oct. 2016).
 US Dep’t of Justice & Fed. Trade Comm’n, Antitrust Guidelines for Collaborations Among Competitors, at 4 (2000).
 Press Release, US Dep’t of Justice, The Justice Department and the Federal Trade Commission Announce Expedited Antitrust Procedure and Guidance for Coronavirus Public Health Efforts (March 24, 2020); see also LawFlash: COVID-19: Antitrust Agencies to Expedite Competitor Collaboration Reviews (March 24, 2020); LawFlash: COVID-19 Antitrust Considerations: The Boundaries of Industry Collaboration (March 18, 2020).
 US Targets Drug Pricing, No-Poach Deals for Antitrust Action in 2020, The Wall Street Journal (Jan. 15, 2020) (subscription required for link access).
 See Antitrust and Economic Opportunity: Competition in Labor Markets, Hearings before the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law, 116th Cong., 1st Sess. (Oct. 29, 2019).
 See, e.g., Mitigating The Risk Of Enforcement Actions And Litigation From ‘No Poach’ And Other Agreements, Bloomberg Law (Oct. 1, 2019); LawFlash: DOJ’s First Enforcement Action for ‘No-Poaching’ Agreements Since the Landmark Antitrust Guidance for HR Professionals (Apr. 12, 2018); LawFlash: DOJ Antitrust Division Announces Imminent Criminal Prosecution for ‘No Poaching’ Agreements (Feb. 6, 2018); see also LawFlash: Are Your Employment Practices in Breach of Antitrust Law? (Mar. 30, 2018).