AGs Recommend Increased State and FTC Collaboration on Antitrust Enforcement to Fight Practices that Depress Wages and Limit Opportunity
July 16, 2019
Carson City, NV – Nevada Attorney General Aaron D. Ford joined a coalition of 18 states in submitting comments to the Federal Trade Commission (FTC) urging collaboration between regulators. The comments are aimed at protecting workers from anticompetitive labor practices that depress wages, limit job mobility and limit opportunities for advancement. In an official comment letter submitted in connection with the FTC’s hearings on competition in the 21st century, AG Ford and other attorneys general argue that regulators should increase their focus on antitrust enforcement in the labor market and use their authority to crack down on harmful practices—like anticompetitive non-compete and no-poach contract agreements—in addition to considering how workers are impacted by proposed mergers.
“Antitrust laws work to prevent harmful practices like monopolization, price-fixing and market allocation, so Nevadans are protected from higher prices, depressed wages, decreased supply of products, or lower quality products and services,” said AG Ford. “These comments express my strong interest in cracking down on anticompetitive activity within Nevada.”
State attorneys general and the FTC have a strong interest in protecting the competitiveness of markets and can work independently or collaboratively to take enforcement action to prevent antitrust law violations. Antitrust enforcers are increasingly considering how mergers impact labor markets. State attorneys general, in particular, have been active in bringing enforcement actions against companies who impose restrictive contract agreements that limit workers’ ability to obtain competitive wages and benefits.
In their comments to the FTC, the attorneys general urge consideration of the following labor considerations in antitrust matters:
- Impact of company mergers on workforce: Antitrust enforcement should consider whether merging companies have specialized workforce needs and/or are within the same geographic area with a small workforce. A merger with either of these factors could result in fewer jobs and limited ability for specialized workers to switch to other types of work. If it seems like one of these labor market conditions could apply, enforcers could gather information from the human resources departments of the merging companies and competitors to better understand the labor needs and hiring practices that might occur.
- Effect of non-compete, non-solicitation, and no-poach agreements on worker job mobility: These types of agreements can limit the job mobility of workers. Non-compete agreements prevent employees from seeking work with a competing company. Non-solicitation agreements prohibit employees from soliciting employees of their current employer to move with the employees to a new job and may effectively act as a non-compete agreement. Certain types of no-poach agreements prevent employees from leaving one franchise to pursue a better job at another franchise in the same chain. Because of this harm, the letter urges the FTC to ban non-compete agreements for low-wage workers, as many states have done, and intra-franchise no-poach agreements.
The FTC’s recent series of hearings over the past months have been a useful and welcome dialogue on antitrust issues facing today’s government antitrust enforcers. The attorneys general’s comments emphasize the importance of advancing antitrust enforcement to protect workers in today’s rapidly evolving economies and collaborating with the FTC to do just that.
In addition to Nevada, other states and territories participating in the comment letter include: California, Delaware, the District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Pennsylvania, Rhode Island, Virginia and Washington.