Antitrust Enforcement in Labor Markets: Insights Into 2024

2023 brought important developments in antitrust enforcement in labor markets, an important priority for both the Department of Justice’s Antitrust Division (DOJ) and the Federal Trade Commission (FTC). The agencies have signaled a multifaceted approach—of merger enforcement, rulemaking, and criminal enforcement—to protect competition for workers, and at the same time creating new areas of risk for employers.

We gather O’Melveny’s insights on several key developments and preview what may come in 2024. Click on the resource links discussed below to learn more. 

Investigating How Mergers May Affect Labor Markets

The enforcement agencies have indicated that they will continue to investigate whether transactions may reduce competition in labor markets, and they have taken concrete steps to bolster their ability to do so. In 2022, DOJ successfully challenged Penguin Random House’s proposed acquisition of Simon & Schuster on the theory that the combined company would be able to reduce advances paid to authors of anticipated top-selling books. In 2023, the FTC and DOJ released updated Merger Guidelines confirming that the agencies would continue to investigate and challenge mergers that they believe may reduce competition in labor markets. In addition, the FTC proposed dramatic changes to Hart-Scott-Rodino filings that would significantly increase their scope and burden. Notably, the changes encompassed by the proposed rule would require filers to describe where they compete for workers and disclose any recent labor- or safety-related violations.

Proposed Ban of Non-Compete Agreements

In January 2023, the FTC proposed a rule that would impose a federal ban on virtually all non-compete agreements between workers and employers, branding them as “unfair methods of competition” prohibited by Section 5 of the FTC Act. This proposed rule closely aligns with existing law in California, which has a long and robust history of prohibiting non-compete agreements under state law. A group of O’Melveny practitioners examine what California’s experience can teach us about a world without non-competes. The article analyzes the strategies that California businesses have used to protect their legitimate interests without relying on non-compete agreements and the case law that has developed in response to these efforts.

Government Enforcement and Private Suits Challenging Hiring Restrictions

2023 brought continued focus on wage and hiring restrictions. Although DOJ dismissed its last outstanding criminal no poach cases after suffering a string of losses at trial, government enforcers continue to affirm that enforcement in labor markets remains a top priority. Civil plaintiffs also challenged hiring restrictions that accompanied legitimate business collaborations. In one such case, O’Melveny filed an amicus brief on behalf of a group of law and economics scholars addressing the key question of whether plaintiffs can adequately plead that an agreement not to hire employees is a per se antitrust violation, even if the agreement is part of a legitimate collaboration between the involved businesses.

Withdrawal of Guidance on Information Exchanges

Both DOJ and the FTC withdrew longstanding guidance regarding information sharing that, among other things, created a “safety zone” for sharing information about wages, salaries, or benefits under prescribed circumstances. With the safe harbor withdrawn, traditional antitrust principles will drive the analysis of whether information sharing faces risk of government or private-plaintiff action. DOJ has shown continued interest in this area, filing a civil suit against Agri Stats Inc. in which the allegations relate to the collection and distribution of competitively sensitive information.  

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Consistently ranked among the top global antitrust practices, O’Melveny’s Antitrust & Competition team is well-positioned to help companies navigate the complexities posed by antitrust enforcement in labor markets. If you have any specific questions, please reach out to a member of our team. 

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