DOJ and FTC Issue Antitrust Employment Law Guidelines on Eve of New Administration

In the final days of the Biden administration and on the eve of significant agency turnover, the US Department of Justice Antitrust Division (DOJ) and Federal Trade Commission (FTC) issued a new set of guidelines addressing how the agencies will assess whether business practices that affect workers violate the antitrust laws. The guidelines—which in some respects are in tension with existing case law—outline types of conduct involving labor markets that the agencies assert “may” or “could” violate the antitrust laws, leaving significant room for interpretation as to whether particular facts and circumstances could subject employers to liability.

The eleventh-hour release of the guidelines, over the objection of the two Republican-appointed FTC commissioners (including incoming Chairman Andrew Ferguson), also raises doubts as to whether the guidelines will remain in place under the new administration. Employers with questions about potential legal risks in this uncertain environment are encouraged to consult with antitrust and employment counsel.

THE 2016 GUIDANCE

In October 2016, the DOJ and FTC jointly issued Antitrust Guidance for Human Resource Professionals (the 2016 Guidance). The 2016 Guidance stated:

• The DOJ and FTC would treat so-called “naked” wage-fixing and no-poach agreements among employers as per se illegal and subject to criminal prosecution; and
• The sharing of information about terms and conditions of employment among employers “could serve as evidence of an implicit illegal agreement,” although the guidance clarified that information exchanges could occur lawfully, for example if conducted in accordance with then-existing safe harbor guidance.[1] As we previously reported, in 2023 the agencies withdrew the guidance that defined those safe harbors, creating doubt about whether the safe harbors continue to be “safe.”

THE 2025 GUIDELINES

On January 16, 2025, the DOJ and FTC replaced the 2016 Guidance with a new publication titled Antitrust Guidelines for Business Activities Affecting Workers (the Guidelines). In contrast with the 2016 Guidance, which addressed a relatively narrow scope of conduct—wage-fixing and no-poach agreements and information sharing—the 2025 Guidelines cover significantly more ground:

• They reiterate that “wage-fixing and no-poach agreements may violate the antitrust laws and can lead to criminal charges,” citing as examples “agreements between businesses . . . about workers’ salaries or other terms of compensation” and “agreements between businesses . . . not to hire, solicit, and/or otherwise compete for . . . workers.” The Guidelines warn that the DOJ may “criminally investigate and, where appropriate, bring felony charges against the participants in these agreements, including both individuals and companies.”
• The Guidelines specifically extend the no-poach prohibition to franchise agreements, providing that agreements between franchisors and franchisees not to compete for workers can be per se illegal, and a franchisor may violate the antitrust laws by organizing and enforcing a no-poach agreement among franchisees that compete for workers.
• They tighten the 2016 information sharing guidance by (1) excluding the now-withdrawn safe harbor exception, (2) clarifying that it may be unlawful to provide competitively sensitive information through an algorithm or third party, and (3) stating that information exchanges that are used to generate wage or other benefit recommendations may be unlawful “even if the exchange does not require businesses to strictly adhere to those recommendations.”
• In contrast to the 2016 Guidance, which did not take a position with respect to non-compete provisions,[2] the Guidelines state that “[n]on-compete clauses that restrict workers from switching jobs or starting a competing business can violate the antitrust laws.” While acknowledging the August 2024 court order that set aside the FTC’s final rule banning most non-compete agreements, on which we previously reported, the Guidelines maintain that “the FTC retains the legal authority to address non-competes through case-by-case enforcement actions under the FTC Act” and notes that non-competes may also violate other state and federal laws.
• They provide that “[o]ther restrictive, exclusionary, or predatory employment conditions,” including certain non-disclosure agreements, training repayment obligations, non-solicitation agreements, and exit fee and liquidated damages provisions, “can also be unlawful.” These examples track those that the FTC identified in its Supplementary Information issued in connection with its now enjoined non-compete rule as restrictions that may unlawfully “function to prevent a worker from” or “penalize a worker for” seeking or accepting other work or starting a new business after their employment ends.
• They clarify that the prohibitions apply to both traditional employees as well as independent contractors and appear to target gig economy workers who work as independent contractors for platform-based services, stating that “an agreement between two or more competing platforms to fix the compensation of independent contractors offering their services via the platforms” may be per se illegal and “expose[] the platforms to criminal liability.”
• They state that making “[f]alse earnings claims can violate the law” because “[w]hen workers are lured . . . by false earnings promises, honest businesses are less able to fairly compete for those workers.”
• As with the 2016 Guidance, the Guidelines encourage the public to report suspected violations to the DOJ and FTC and provide instructions on how to do so.

OUR THINKING: SUBJECTIVE GUIDANCE AND UNCLEAR PROSPECTS FOR SURVIVAL SPUR UNCERTAINTY

In their press releases announcing the issuance of the Guidelines, both the DOJ and FTC describe the Guidelines as providing clarity on how the agencies will evaluate employment law practices under the antitrust laws.

However, the Guidelines largely offer high-level, predominantly theoretical guidance on types of conduct that the agencies believe could violate the antitrust laws. For the most part, they do not offer actionable guardrails that employers can reliably turn to in order to assess whether individualized situations may carry legal risk. For example, the Guidelines repeatedly state that conduct “may violate” or “can violate” the law or “may be illegal.”

The introduction to the Guidelines further illustrates this dynamic. In listing the categories of conduct that the Guidelines will address, the intro states that the “list is not exhaustive” and simultaneously warns that “[l]isted activities may or may not be an antitrust violation.”

For the most part, the guidance on individual categories of conduct is similarly ill-defined. For example, in describing non-solicitation agreements by which a worker may be prohibited from soliciting former clients or customers as among the sort of “restrictive” employment conditions that “can” be unlawful, the Guidelines state that such provisions can be anticompetitive “depending on the facts and circumstances.”

Notwithstanding this general lack of precision, employers can glean two relatively clear takeaways:

• The DOJ and FTC continue to believe, as both agencies have since the 2016 Guidance, that naked wage-fixing and no-poach agreements are per se unlawful and subject to criminal prosecution. The earlier pronouncements on wage-fixing and no-poach agreements being per se unlawful have now been extended to independent contractors and relationships between and among franchisors and franchisees.
• Consistent with the 2023 withdrawal of the information exchange safe harbor guidance that was applied across industries, the DOJ and FTC continue to look skeptically at any exchanges of information relating to terms and conditions of employment. These sorts of exchanges, which were commonplace in the past if implemented using the protocols necessary to receive the protection of the safe harbor, should be approached with caution in the current environment.

As for the other covered categories of conduct, including non-compete clauses, non-disclosure agreements, non-solicitation agreements, training repayment provisions, and exit fee and liquidated damages provisions, employers should review their policies and form agreements to ensure that they are carefully drafted and narrowly tailored to achieve their legitimate procompetitive purposes. Given the potential for scrutiny in these areas, employers should consult with employment and antitrust counsel to enhance compliance and reduce overall legal risk.

It remains to be seen whether the Guidelines will remain in place with the new administration or whether they may be rescinded or revised in some way, such as to provide greater clarity to businesses through restoring some form of safe harbor guidance or other more direct commentary on what conduct would be viewed as permissible. In his dissent, incoming Chairman Ferguson was highly critical of the Guidelines’ last-minute issuance, admonishing that “[t]he lame-duck Biden-Harris FTC should not replace existing guidance mere days before they hand over the baton.”

Even if the Guidelines are ultimately withdrawn, that may not happen until replacement guidance is ready, which could take months, particularly given the transition tasks and multiple priorities that must be attended to with any change in administration. For this reason, employers should prepare for these Guidelines to remain in effect for some period of time and evaluate their conduct accordingly.