Antitrust Law Daily Delrahim kicks off DOJ workshop on competition in labor markets
Tuesday, September 24, 2019

Delrahim kicks off DOJ workshop on competition in labor markets

By Elizabeth C. Pope, J.D.

FTC Commissioner Rohit Chopra also weighed in, submitting comments to the Antitrust Division reflecting his own views on the topic of competition in labor markets.

Assistant Attorney General Makan Delrahim opened a public workshop hosted by the Justice Department’s Antitrust Division focusing on the role of antitrust enforcement in labor markets, asserting that "timely and effective antitrust enforcement can go a long way towards promoting robust competition in the marketplace for employment services." Speaking in Washington on September 23, Delrahim also observed that labor competition matters are not "inherently pro-worker or pro-business."

Workshop agenda. When announcing the one-day workshop, the Antitrust Division stated that issues on the agenda would include the role of employer collaboration, contractual arrangements between employers on competition for workers, labor monopsony in merger enforcement, and antitrust exemptions for collective bargaining and other labor union activity. Workshop participants included economists from government and academia as well as an official from the National College Players Association.

Antitrust enforcement in labor markets. In his remarks, Delrahim noted that "the history of antitrust enforcement in labor markets has been uneven." Early cases "marshaled the antitrust laws against labor unions," he said, while in the modern era enforcement has focused "on mergers, information exchanges, and collusion agreements."

As recent examples, he cited a suit against human resource professionals at Utah hospitals for conspiring to exchange non-public prospective and current wage information about registered nurses; several suits filed during the Obama Administration against high tech companies (including Adobe and Google) for allegedly entering into unlawful no-poach agreements; as well as a more recent suit alleging an unlawful no-poach agreement by two train equipment manufacturers.

Delrahim noted that the workshop is the first in a two-part series hosted in partnership with the FTC. The second day of the workshop—the date is to be announced—will focus on the use of noncompete clauses in employment contracts.

Chopra’s comments. In comments submitted to the Antitrust Division on September 18, FTC Commissioner Rohit Chopra noted that he believes the FTC should launch a participatory rulemaking proceeding regarding the use of noncompete covenants in worker contracts. He asserted that while 18 percent of all workers—nearly 30 million people—are subject to a noncompete restriction, less than half of those workers possess trade secrets, which he described as "one of the primary purported justifications for non-competes." In Chopra’s view, "rulemaking might be particularly fruitful when private enforcement is unlikely to remedy misconduct."

Other key issues affecting competition in labor markets Chopra cited are: the need for the Department of Justice to prosecute illegal collusion on wages and compensation; an extension of the antitrust labor exemption for workers in the "gig economy," and stronger Justice Department and Department of Agriculture enforcement against abuses of market power targeting farmers and ranchers.

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