Update to FTC DOJ Guidelines on Business Activities Affecting Workers

On January 16, 2025, during the final days of the Biden Administration, the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division (DOJ) jointly issued Antitrust Guidelines for Business Activities Affecting Workers (Guidelines). The Guidelines replace the 2016 FTC-DOJ Antitrust Guidance for Human Resource Professionals (2016 Guidance) and seek to provide clarity and transparency on how the FTC and DOJ assess whether business activities affecting workers violate antitrust laws. While the Guidelines cover some of the same topics (e.g., wage-fixing, no-poach, and information-sharing agreements) as the 2016 Guidance, the Guidelines also discuss the potential antitrust liability of other and new labor-related agreements (e.g., non-compete and other employment agreements) and discuss the applicability of antitrust laws to independent contractors.

Below is a summary of the Guidelines as well as a comparison to the 2016 Guidance. It remains to be seen if and how the Trump Administration uses the Guidelines.

Wage-Fixing and No-Poach Agreements

Like the 2016 Guidance, the Guidelines state that wage fixing agreements (i.e., between businesses or between individuals at different businesses about workers’ salaries or other terms of compensation) and no-poach agreements (i.e., between businesses or between individuals at different businesses not to hire or solicit or compete for current, former, or potential workers) can violate antitrust laws and lead to criminal charges.

Additionally, the Guidelines specify that no-poach agreements between a franchisor and a franchisee or among franchisees are subject to antitrust scrutiny and can be per se illegal.

Information-Sharing Agreements

While the Guidelines continue to opine that sharing competitively sensitive information with competitors about terms and conditions of employment may violate the antitrust laws, the Guidelines omit the safe harbor guidance in the 2016 Guidance that information can be shared when: (1) managed through a neutral third party; (2) the data is relatively old; (3) the data is aggregated; and (4) there are enough data sources such that the information cannot be attributed to a specific source. Instead, the Guidelines emphasize that information exchanges through a third party or algorithm can be unlawful.

Non-Compete Agreements

The 2016 Guidance explicitly states that it doesn’t address agreements between an employer and an employee, like non-compete clauses. In contrast, the Guidelines opine that non-competes, agreements that prevent employees from leaving their jobs for a competing or potentially competing employer, can violate antitrust laws. Also, while noting the FTC rule banning most non-competes, which was set aside in 2024 and is being litigated, the Guidelines refer to the FTC’s and DOJ’s continued ability to investigate and challenge non-compete agreements on a case-by-case basis.

Other Employment Agreements

In addition to non-compete agreements, the Guidelines discuss other employment agreements that can impede worker mobility and restrict competition:

• Non-disclosure agreements so broad that they function to prevent workers from seeking or accepting other work can violate antitrust laws;
• Training repayment agreements that require a person to repay any training costs if they leave their employer can be anticompetitive if they function to preview a worker from working for another firm or starting a business;
• Non-solicitation agreements that prohibit a worker from soliciting former clients or customers and function to prevent a working from seeking or accepting other work can be anticompetitive; and
• Exit fee and liquidated damages provisions that require workers to pay a financial penalty for leaving their employer can also be anticompetitive depending on the facts and circumstances.

Independent Contractors

The Guidelines also include a section on independent contractors. It notes that antitrust laws apply to workers, including independent contracts, and to platform businesses (e.g., smartphone apps).

Also, according to the Guidelines, the FTC and DOJ may investigate businesses that make false or misleading claims about potential earnings that workers, including independent contractors, may realize.