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    Antitrust Law Journal

    Volume 86, Issue 2

    The New Labor Antitrust

    Eric Andrew Posner

    Dec 26, 2024

    133 min read

    Antitrust Antitrust Litigation & Enforcement Antitrust Policy & Legislation DOJ Antitrust Enforcement FTC Antitrust Enforcement Horizontal Agreements Joint Conduct Mergers Monopoly Power Premerger Review State Antitrust Enforcement Unilateral Conduct

    Summary

    • In recent years, the courts have seen a new batch of cases involving antitrust claims by workers against their employers, a traditionally rare kind of litigation. The cases have been driven by a wave of empirical studies that have revealed that labor markets are highly concentrated and that anticompetitive behavior by employers—including no-poach agreements and noncompete clauses—is common.
    • A review of the cases and the academic literature reveals that, while the courts have made progress in recognizing claims by workers, a skeptical attitude toward these cases lingers, which may account for their continued relative scarcity.
    • However, contrary to judicial instinct, the empirical studies, as well as normative considerations related to the central role of work in human well-being, suggest that labor claims deserve more, rather than less, judicial support than traditional product-market claims.
    The New Labor Antitrust
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    Introduction

    Recent years have seen a surge of litigation against employers for antitrust violations in labor markets, a traditionally rare kind of lawsuit. This litigation has resulted, to an unusual extent, from academic research, which has identified widespread anticompetitive behavior in labor markets and broadly scattered pools of labor-market concentration.

    As the cases have made their way through the courts, they have been received with a mix of openness and skepticism. Both the receptive and skeptical courts recognize that antitrust law applies to labor markets as it does to other kinds of markets, such as output or product markets. But the skeptical courts see labor antitrust cases brought by workers as requiring special scrutiny. These courts have applied the rule of reason to labor cases that would be subject to the per se or quick look rule if identical conduct took place in the product market. This can be a death knell, especially in private litigation where burdensome class certification rules interact with complex market definition requirements to create logistical barriers for plaintiffs. Some courts have applied the ancillary restraints doctrine more aggressively in labor antitrust cases than in product-market cases. Several criminal cases against employers have also floundered despite good facts.

    Skepticism about labor antitrust is not new, nor is it confined to the courts. A thread of hostility toward labor connects the origins of antitrust law to the present, though the hostility has taken different forms. At the origin, a common view among the judiciary was that workers cartelized labor markets by forming unions: antitrust law’s function was to attack such cartels rather than protect workers from buy-side cartelization of labor markets by employers. After the labor exemption was created to protect unions, this hostility shifted as suspicions grew that unions and employers colluded to cartelize product markets (with the unions compensated with a share of the rents). Other judges and academics believed that workers neither benefited from nor sought free labor markets, and thus were not entitled to antitrust protection. Labor markets were the domain of labor law, and federal (and state) labor policy envisioned a regulated labor market rather than a free market.

    If that was the view once, it has since changed. The dominant conceptual model of labor markets and policy shifted in the 1980s. Union density collapsed, and labor markets were seen not only as competitive but as commodified. No longer a source of dignity or personal value, work was simply a cost that was incurred by people in return for money to be spent on goods and services, which would be the primary source of utility for people in their role as consumers. Because labor markets were thought to be competitive, workers were paid as little or as much as they could be paid consistent with surplus maximization and economic growth; there was little for law to do. Antitrust law would continue to play no role in labor markets, this time because it was unnecessary.

    One could see this as progress: antitrust law, once used to target workers, would be locked away in the product market. But that also meant it could not be used affirmatively by workers to protect themselves from anticompetitive conduct by employers. Antitrust claims brought by workers were seen as anomalous, redundant, impractical, or—where they were accepted—relevant only because they were brought in unusual settings, most notably in the case of league sports. As a result, few labor-market cases were brought, and fewer still were successful, leaving the precedent desert that the modern litigation surge has finally begun to fertilize.

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