DOJ and FTC Issue New Antitrust Guidelines Regarding Business Practices That Impact Workers

Four days before the change in administration and in the wake of several high-profile trial losses in cases involving alleged “no-poach” and wage-fixing agreements, the Federal Trade Commission (FTC) and the Department of Justice, Antitrust Division (DOJ) jointly approved new guidelines, Antitrust Guidelines for Business Activities Affecting Workers” (the “2025 Guidelines” or “Guidelines”), that explain how antitrust enforcers have identified and assessed whether an agreement or business practice affecting workers may violate the antitrust laws.  The 2025 Guidelines were voted out at the FTC on a split 3-2 vote along party lines, with a brief but scathing dissenting statement from the Republican commissioners (including incoming FTC Chair Andrew Ferguson) that raises serious doubts as to how well the Guidelines reflect the approach the agencies will take during the next four years.  On the eve of the incoming Trump Administration, the 2025 Guidelines replaced the previous joint DOJ and FTC antitrust guidelines regarding employment practices that were issued in 2016, “Antitrust Guidance for Human Resource Professionals” (the “2016 Guidelines”), during the tail-end of the Obama Administration.

The 2025 Guidelines advance a similar agency perspective as the 2016 Guidelines—namely, that the antitrust laws equally apply to labor markets and competition for workers as they do to markets to sell products; “no-poach” and wage-fixing agreements are per se unlawful; and agreements and business practices affecting labor markets may subject individuals and companies to civil and/or criminal liability.

But the 2025 Guidelines contain a more expansive and robust view of which types of agreements and business practices can violate the antitrust laws.  Specifically, the Guidelines incorporate the types of conduct the agencies have investigated and brought enforcement actions against since the adoption of the 2016 Guidelines and express much greater skepticism about information-sharing among competitors conducting wage and compensation benchmarking, even when using third parties.  The 2025 Guidelines also warn that sharing employment-related information that is competitively sensitive through algorithms or a third party’s tools or products can violate the antitrust laws.

What’s in the 2025 Guidelines?

Broadly speaking, the 2025 Guidelines explain that the agencies focus on several general principles to determine if an agreement among companies harms competition for workers, including implicit agreements and so-called “handshake agreements.”  The agencies look at whether the companies have:

• discussed wages or other terms of employment;
• engaged in parallel behavior that shows a “shared understanding”;
• invited another company to join a plan to restrict competition and then acted consistent with that plan; or
• used an intermediary to obtain competitively sensitive information.

The 2025 Guidelines cover seven categories of agreements and practices the agencies may investigate as potential antitrust violations:

(1) Agreements not to recruit, solicit or hire workers, or to fix wages, which may lead to criminal liability for companies or executives.  This category includes, for example: wage-fixing agreements; agreements to align, stabilize, or coordinate wages, even if no specific wage is agreed upon or even if just a starting point, benchmark, ceiling, or range is agreed upon; and agreements not to “cold call” workers.

(2) Franchise “no-poach” agreements.  While “no-poach” clauses in franchise agreements have been the subject of significant litigation in recent years, including whether these clauses should be per se illegal or analyzed under the rule of reason, the 2025 Guidelines provide that such agreements—whether between the franchisor and its franchisee(s) or between the franchisees—can be per se illegal without a showing of actual harm to workers.

(3) Exchange of competitively sensitive information, including through third parties or algorithms.  The 2025 Guidelines indicate that exchanges of competitively sensitive compensation information may have anticompetitive effects, even if such effects are not intended or information is shared through a third-party intermediary.  For example, while case law is currently developing in this area, the Guidelines state that using an algorithm or other software to generate compensation recommendations can be unlawful even if the businesses are not required to follow those recommendations or they retain discretion to decide their own compensation levels.

Moreover, without any citations or meaningful explanation, the 2025 Guidelines also state that companies that are party to a legitimate transaction, joint venture, or collaboration may still violate the antitrust laws by sharing information about compensation or other terms of employment.

Finally, the 2025 Guidelines also remove language found in the 2016 Guidelines that identified factors that mitigate information-sharing risks.

(4) Employment agreements that restrict workers’ mobility, including non-compete agreements.  The agencies also provide examples of enforcement actions pursued by the FTC and DOJ in recent years against non-compete agreements between employers and employees—as this was a priority area for enforcement—and reference the FTC’s rule banning most non-compete agreements, which a district court enjoined on a nationwide basis and is currently on appeal.

(5) Other restrictive, exclusionary, or predatory employment conditions that harm competition.  The 2025 Guidelines indicate that this broad category of potentially unlawful arrangements may include non-disclosure agreements, as well as training repayment, non-solicitation, and exit fee or liquidated damages provisions or agreements, if they “function to prevent” workers from seeking or accepting another job or starting a business.

(6) Businesses involving independent contractors.  The 2025 Guidelines state that the antitrust laws cover businesses and agreements that involve independent contractors, such as technology platforms or apps that compete to hire independent contractors.

(7) False earnings claims.  The 2025 Guidelines provide that, when businesses make false or misleading claims of potential earnings that workers may realize, this can violate the antitrust laws as a deceptive act or practice under Section 5 of the FTC Act.  The FTC explained that it has taken enforcement action against various businesses for allegedly false earnings claims because, the agency contends, it misleads workers and harms competition by preventing businesses from being able to fairly compete for those workers.

Dissenting opinion of FTC Republican Commissioners

Commission Andrew Ferguson (who became Chair on January 20, 2025) issued a dissenting opinion, which Commissioner Melissa Holyoak joined.  While he generally agreed that it is appropriate to issue “non-binding” guidance, Commissioner Ferguson noted that the “lame-duck Biden-Harris FTC should not replace existing guidance mere days before they hand over the baton,” and that “[t]he Biden-Harris FTC announcing its views on how to comply with the antitrust laws in the future is a senseless waste of Commission resources.  The Biden-Harris FTC has no future.”

What’s next?

The 2025 Guidelines are non-binding and face an uncertain future under new agency leadership.  With President Trump assuming office, Commissioner Ferguson has now taken over as FTC Chair from Lina Khan.  Commissioner Khan can remain at the Commission until she steps down or is replaced, and she recently announced that she will step down by January 31, at which point the FTC will have a 2-2 split until the Senate confirms a new Commissioner.  President Trump has already tapped Mark Meador as his nominee to fill Khan’s seat and, assuming he is confirmed by the Senate, will create a Republican 3-2 majority at the FTC upon his swearing-in.  With the anticipated appointment of Gail Slater to lead the DOJ Antitrust Division (also subject to Senate confirmation), companies can expect a shift in priorities at the FTC and DOJ, which may include de-emphasizing some types of labor-market enforcement.  But given that many of the DOJ’s “no-poach” and wage-fixing cases were filed during the first Trump administration, there likely will be some continued antitrust enforcement related to employment markets.  In the meantime, companies should continue to heed current guidance on labor practices and keep a close watch on this developing space.