Paul Peter Nicolai
Workplace Antitrust - Increased Enforcement
Congress passed antitrust laws to counter monopoly control and prevent companies from acting in concert to control prices. The laws advance these interests by prohibiting conduct that is per se anticompetitive (like wage fixing) and conduct that suppresses competition.
In the workplace, antitrust laws operate on the principle that employers may not agree not to compete with each other. Antitrust issues can arise when competing employers enter into agreements that restrict competition about wages or benefits or limit job opportunities or other terms of employment.
Federal enforcement agencies have issued guidance on situations likely to create antitrust issues. These include agreements between employers: (1) to control employee salary, benefits, or other terms of compensation, or; (2) to refrain from soliciting or hiring employees of the other employer. This is true regardless of whether the agreement is formal or informal and extends to circumstances where, even in the absence of an agreement, the exchange of information creates an inference of a common plan to restrict competition. There are several types of situations likely to raise antitrust concerns:
information exchanges concerning employee salaries, benefits, and other compensation arrangements;
agreements between two or more employers not to solicit or hire employees of the other employer;
agreements concerning terms or conditions of employment;
agreements not to compete too aggressively in recruiting employees;
sharing company-specific information about employee compensation or terms of employment with another company;
participating in trade or business meetings where these topics are discussed;
discussing these topics with colleagues at other companies, including during social events or other non-professional settings;
receiving documents that contain another company’s internal data about employee compensation.
These rules are enforced. The Department of Justice obtained a guilty plea in a 2022 case involving a healthcare staffing company that agreed with a competitor to fix the wages paid to contract nurses. The court imposed a criminal fine of $62,000 on the staffing company and ordered restitution of $72,000 to impacted nurses.
In another recent case, a business owner was prosecuted and found guilty of obstructing a Federal Trade Commission investigation into charges of labor-market collusion. The case involved an alleged agreement to fix the wages paid to patient care therapists. The business owner faces a penalty of five years imprisonment and a $250,000 fine.
The Department of Justice recently brought a civil antitrust lawsuit against several companies that allegedly conspired to exchange information about employee wages and benefits. The proposed settlement would require the companies to pay $84.8 million in restitution to workers harmed by the information exchange. It would also impose a court-appointed monitor to ensure ongoing compliance with the settlement terms.
Federal enforcement agencies have issued guidance on how businesses may be able to qualify for a safety zone in the context of sharing information with competitors:
Information collected is managed by a third party (e.g., a purchaser, government agency, healthcare consultant, academic institution, or trade association);
data shared with or available to competitors is more than three months old;
at least five entities are reporting data, and no individual entity’s data represents more than 25 percent of the overall data; and
information shared is sufficiently aggregated so that recipients cannot identify the specific data shared by an individual entity.