On April 13, 2020 the Federal Trade Commission’s Bureau of Competition (“FTC”) and the Antitrust Division of the U.S. Department of Justice (“DOJ”) (hereinafter the “FTC” and “DOJ” may be jointly referred to as the “Agencies”) announced they would be “on alert” for violations of the federal antitrust laws aimed at exploiting the COVID-19 pandemic to engage in anticompetitive behavior that harms workers. The statement particularly notes the potential danger to workers on the frontline of this crisis, including doctors, nurses, first responders and those who work in grocery stores, pharmacies and warehouses, among other essential service providers. The Agencies are concerned that some businesses will use the COVID-19 pandemic as an opportunity to lower employee wages or reduce hours worked via unlawful wage-fixing, no-poach or other agreements with competitors.
In a joint statement, the Agencies acknowledged that responding to the COVID-19 pandemic “may require unprecedented cooperation between federal, state, local, and tribal governments, private businesses, and individuals.” That said, the Agencies are “on alert” for employers, staffing companies (including medical travel and locums agencies) and recruiters who engage in or propose collusive agreements. Additionally, the Agencies indicated they would challenge individuals and companies who leverage monopsony power to engage in unilateral anticompetitive conduct that harms competition in labor markets.
This statement follows prior COVID-19 guidance in which the FTC and DOJ announced an expedited review process for companies seeking a DOJ business review letter or an FTC advisory opinion for COVID-19 related conduct “addressing public health and safety.” In their initial guidance, the Agencies committed to responding within seven days, once the Agencies have “all necessary information.” These advisory opinions will initially be good for up to one year after they’ve been granted.
Practical Takeaways
- As staffing gets tight and resources are taxed, company personnel who are involved in the hiring, recruitment, retention or placement of workers should not discuss employee salaries or wages with competitors, including levels for “hazard,” “frontline” or “incentive” pay.
- In addition, companies should not agree with competitors to not recruit, poach or otherwise hire these essential employees from each other. While companies may want to enter into these “no-poach” agreements during the COVID-19 pandemic to ensure appropriate staffing levels, such agreements likely harm employees and violate the antitrust laws. Some employees who are unhappy with their current work environment might take this opportunity to switch jobs. Despite the poor timing, companies need to make their own, independent decisions on whether to hire these employees and how much to pay them.
- Companies need to be mindful when exchanging competitively sensitive information (i.e., wages and benefits) with competitors related to COVID-19 workforce issues. For instance, sharing information related to salary or benefit levels for furloughed workers is likely problematic. In addition, discussing plans related to layoffs or furloughs is not recommended as those decisions should be made interpedently.
- Given the dire circumstances, it may become necessary for competitors and local government officials to cooperate with respect to staffing levels and workforce issues. While this may be acceptable under the antitrust laws, companies need to be mindful of the potential legal ramifications and involve legal counsel in those discussions.
Accordingly, if you have questions about how the Agencies would view an arrangement or would like additional information about this topic, please contact a member of Hall Render’s Antitrust Practice Group or Labor & Employment Practice Group.
- William Berlin at (202) 370-9582 or wberlin@hallrender.com;
- Michael Greer at (317) 977-1493 or mgreer@hallrender.com;
- Jon Bumgarner at (317) 977-1474 or jbumgarner@hallrender.com;
- John Bowen at (317) 429-3629 or jbowen@hallrender.com;
- Abby Kaericher at (202) 780-2989 or akaericher@hallrender.com; or
- Your regular Hall Render attorney.
Hall Render’s attorneys and professionals continue to maintain the most up-to-date information and resources at our COVID-19 Resource page, through our 24/7 COVID‑19 Hotline at (317) 429-3900 or by contacting your regular Hall Render attorney.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
