FTC Archives - Laborsphere

Artificial Intelligence Briefing: FTC to Address Commercial Surveillance and Data Security

National Labor Relations Board and Federal Trade Commission execute Memorandum of Understanding to promote fair competition and advance workers’ rights.

On July 19, 2022, the NLRB and FTC formalized a partnership between the agencies that, among other things, will seek to protect worker rights from algorithmic decision-making. This is the most high-profile instance of the NLRB identifying algorithmic decision-making as something that could impact employee rights protected by the National Labor Relations Act. Employers with organized workforces (or workforces that could be the target of union organizing) should be aware of this development and the NLRB’s growing cooperation with the FTC.

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Third Circuit Rejects Employer’s Attempt to Block Executive’s Move to Rival Despite Non-Compete Agreement

As we have written about previously, an increasing number of states, and Washington, D.C., have limited the circumstances under which employers can bind their employees to non-compete and similar agreements, particularly when low-wage workers (however defined) are involved. The courts, however, are not immune to the trend, as evidenced by the April 21, 2022 decision from the U.S. Third Circuit Court of Appeals, ADP, Inc. v. Levin. In that case, the Third Circuit affirmed a district court’s denial of a preliminary injunction against a senior executive who had resigned from his Chief Strategy Officer position at his prior employer, ADP, to take over the Chief Executive Officer position at rival Benefitfocus.

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DOJ Remains Committed to Aggressive Antitrust Enforcement Against Employers and Their Employees Even in the Wake of Recent Trial Defeats

The Department of Justice Antitrust Division (DOJ) recently suffered significant losses in two criminal trials involving alleged criminal wage-fixing and related “no-poach” agreements by and between competitors. These were the first cases ever where the parties have proceeded to trial after the DOJ pursued criminal charges under Section 1 of the Sherman Antitrust Act predicated on such conduct. The Sherman Act includes penalties for criminal violations of the statute that can reach up to $100 million per violation for companies, and individual defendants can face $1 million fines and up to 10 years in prison. While the DOJ’s trial setbacks raise legitimate questions regarding the efficacy of its aggressive antitrust enforcement agenda — particularly in labor markets — the primary federal agency tasked with enforcing criminal violations of federal antitrust laws shows no signs of pulling back on similar investigations and prosecutions in the future.

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DOJ Encourages State Court to Consider Antitrust Principles to Invalidate Non-Compete Agreements

Non-compete agreements between employers and their employees traditionally are governed by state law. But that did not stop the Antitrust Division of the Department of Justice (DOJ) from recently filing a statement of interest encouraging a Nevada state court to consider federal antitrust principles to invalidate non-compete agreements between a large medical group and its physician-employees. Taken together with other recent actions by the president and federal enforcement agencies, the DOJ’s decision to file this statement signals a more aggressive approach to non-compete enforcement at the federal level.

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NLRB’s General Counsel Announces Support for White House Labor Report

On February 10, 2022, the National Labor Relation Board’s (NLRB) General Counsel, Jennifer Abruzzo, issued Memorandum GC 22-03 announcing her agreement with and support of the Biden administration’s Task Force on Worker Organizing and Empowerment (Task Force) February 7, 2022 report. The Task Force was created by executive order in April 2021 to identify ways the executive branch can promote worker organization and collective bargaining through existing policies and programs. The Task Force’s report included recommendations to increase organizing and encourages collaboration between government agencies focused on worker protection. In addition to instructing field offices to adopt the recommendations outlined in the report, Abruzzo’s memorandum details current interagency undertakings and outlines future efforts to strengthen those collaborations.

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Top 10 Non-Compete Law Developments of 2021

The top 10 non-compete law developments in 2021 demonstrated a continued hostility by lawmakers and courts toward noncompetition and no-hire agreements, as well as the need for employers to stay current on the diverse state-specific limitations governing restrictive covenants, new federal activity in the area and ongoing case law developments. In light of these trends, national employers would do well to (1) be selective in identifying those categories of employees required to sign such agreements, (2) rely on allowable choice-of-law and venue provisions to maximize the chances of enforceability, (3) keep a keen eye on likely federal developments in the year ahead and (4) avoid no-poach agreements with employers as a poor substitute for narrowly tailored employee non-compete agreements.

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