Insights

In a landmark verdict on April 14, 2025, the U.S. Department of Justice Antitrust Division notched its first-ever jury trial conviction for criminal wage-fixing under the Sherman Act in United States v. Eduardo Lopez in the District of Nevada. A home health care staffing executive, Eduardo (“Eddie”) Lopez, was found guilty of (1) conspiring with several competing home healthcare staffing agencies to fix the wages of home health nurses in the Las Vegas area, and (2) defrauding the unwitting buyer of his agency by concealing the then-ongoing antitrust investigation into nurse wage and hiring practices. It is worth noting, however, that while the Lopez conviction is a significant milestone for the DOJ’s campaign into labor antitrust violations, wage-fixing cases may be more straightforward to prosecute than no-poach agreements, where the DOJ still has not prevailed before a jury. This victory nonetheless affirms the DOJ’s ability to criminally prosecute labor market collusion as a criminal offense after numerous failed attempts, signaling the prudence of further caution for companies and individuals to mitigate risk in labor antitrust markets.

Federal Trade Commission Chair Andrew Ferguson announced on February 24, 2025, that the FTC will create the agency’s “first-ever” labor task force, signaling the agency’s continued focus on competition in labor markets, answering an open question from companies as to the fate of the agency’s no-poach and non-compete enforcement priorities. On February 26 Chair Ferguson followed up on his announcement with a Directive Regarding Labor Markets Task Force, providing additional details on the task force and the agency’s priorities.

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.

Plaintiffs battling the Federal Trade Commission’s ban on non-compete clauses in employment agreements notched a significant victory recently.  On August 20, 2024, U.S. District for the Northern District of Texas Judge Ada Brown permanently blocked the agency’s action in Ryan LLC v. Federal Trade Commission, concluding the rulemaking exceeded the agency’s statutory authority.  Judge Brown had previously granted a preliminary injunction that limited its effect to the plaintiffs in the case.  Yesterday’s ruling, however, which granted the plaintiffs’ summary judgment motion, permanently blocks the ban nationwide.

The Federal Trade Commission (“FTC”) is now batting .500 in its effort to defend its rule banning most employee non-compete agreements.  On July 23, 2024, Judge Kelley Hodge of the U.S. District Court for the Eastern District of Pennsylvania denied the request for a preliminary injunction to block that rule from going into effect pending a full trial.  This decision is at odds with the decision issued earlier this month by Judge Ada Brown of the U.S. District Court for the Northern District of Texas, which found that the FTC had exceeded its statutory authority and issued a limited preliminary injunction that prevented the rule from becoming effective as to the plaintiffs in that case. 

On July 3, 2024, Judge Ada Brown of the U.S. District Court for the Northern District of Texas temporarily blocked the Federal Trade Commission (“FTC”) from enforcing its recent rule banning virtually all employee non-compete agreements in the United States.  In its 33-page opinion, the court ruled that the plaintiffs are likely to succeed on the merits of their claims that the FTC lacks statutory authority to issue its non-compete ban via rulemaking and that the FTC’s decision to ban non-competes broadly was arbitrary and capricious. However, in a surprise twist, the court declined to grant nationwide preliminary relief, opting instead to limit its injunction to the specific plaintiffs in the action.  The court indicated that it intends to issue a final ruling by August 30, 2024—days before the non-compete ban is scheduled to take effect on September 4.

On April 26, 2024, the Department of Labor (“DOL”) published the Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees Rule (“Final Rule”), which will increase the minimum salary thresholds for bona fide executive, administrative, and professional exemptions under the FLSA.  Effective July 1, 2024, the annual salary thresholds for these “white collar” exemptions will increase to $43,888 (from $35,568) and increase again on January 1, 2025 to $58,656 and the threshold for highly-compensated employees will also increase from $107,432 to $132,964.  Effective July 1, 2025, the methodology will change and these thresholds will increase again (to $58,656 and $151,164, respectively).

On April 23, 2024, the Federal Trade Commission (“FTC” or “the Agency”) voted 3-2 along partisan lines in a special public meeting to adopt the “Non-Compete Clause Rule” (the “Final Rule”), which will prohibit most employee non-competes with retroactive effect, except existing non-compete provisions of “senior executives.”  The Final Rule will also ban future non-compete agreements, including for senior executives, with limited exceptions.  The rule will not become effective until 120 days after publication in the Federal Register, and covered employers will be required to comply with the Final Rule by that effective date, which could come as early as August this year.  By the FTC’s own estimate, this ban could affect up to one-in-five American workers.

Crowell & Moring previously reported that new paid leave laws would be in effect at the start of 2024 in Chicago and Illinois. (For more information, see Crowell & Moring’s December 1, 2023 Alert, “New Year Will Bring Changes to Paid Leave in Illinois and Chicago”). The Chicago City Council has now amended its Paid Leave and Paid Sick and Safe Leave Substitute Ordinance (“Amended Chicago Ordinance”), making a number of changes, including delaying the effective date to July 1, 2024. Cook County also followed suit, acting to bring its laws in line with the new Illinois and Chicago paid leave requirements, with the passage of the Cook County Paid Leave Ordinance (“Cook County Ordinance”) at the end of last year.  

Chicago and Illinois will soon join the growing number of states that require employers to provide employees with paid all-purpose leave, rather than, for example, leave that can only be used as paid sick or safe leave. The new laws are Chicago’s Paid Leave and Paid Sick and Safe Leave Ordinance (“Ordinance”) and the Illinois Paid Leave for All Workers Act (“Act”). Under the new Ordinance, Chicago-based employees may accrue twice as much paid leave (including, now, all-purpose leave and paid sick and safe leave) than under the City’s prior ordinance. And for the first time, Illinois employers outside of Chicago will be required to provide their employees with up to 40 hours of all-purpose paid leave each year.

On October 27, the National Labor Relations Board (“NLRB”) issued a long-awaited Final Rule (“Final Rule”) that will dramatically alter the test for joint-employer status. As proposed,  the Final Rule rescinds the NLRB’s 2020 Final Rule, with the NLRB claiming that the new rule “more faithfully grounds the joint-employer standard in established common-law agency principles.”   In effect, the Final Rule will make it easier for employees of franchises, staffing agencies, and potentially a broad swath of contractors to show that two entities are joint employers. If an entity is found to be a joint employer with the direct employer of unionized employees, “under common-law agency principles,” the entity can be liable for the unfair labor practices of the co-employer and can be required to negotiate with the union representing the workers under the National Labor Relations Act (“NLRA”).  The NLRB’s new rule will take effect on December 26, 2023 and is not retroactive.

On September 8, 2023, the Department of Labor (“DOL”) published a Notice of Proposed Rule Making (“NPRM”) proposing a number of changes that would, if enacted, substantially increase the number of workers who would be eligible for overtime pay under the federal Fair Labor Standards Act (“FLSA”).  Most critically, the NPRM would raise the annual salary threshold for the FLSA’s administrative, executive and professional exemptions -- the so-called “white collar” exemptions -- from $684 per week ($35,568/year) to $1,059 per week ($55,068/year).

On April 11, New York Governor Kathy Hochul announced that the New York State Department of Labor (“NYS DOL”) was releasing long-awaited updates to New York’s Sexual Harassment Model Policy.  The New York State Labor Law requires all employers in New York State to adopt a sexual harassment policy and provide sexual harassment training to employees. Among other revisions, the updated model policy and resources specifically address questions about sexual harassment in a remote working context, as well as expand upon what might constitute gender-based harassment and discrimination.

Yesterday, the Federal Trade Commission proposed a sweeping new rule that would ban employers from including non-compete terms in employment agreements with virtually all of their workers – from janitors to senior executives. Describing such agreements as an “exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses,” the FTC’s rule deems non-compete agreements to be an “unfair method of competition” under Section 5 of the FTC Act, without regard for any business justifications or reasonableness. Potential rulemaking against non-compete clauses has been percolating for some time and has support from the White House, but the breadth of the proposed rule is nonetheless surprising.

New York Governor Kathy Hochul signed new legislation on November 21, 2022 amending Section 215.1(a) of the New York Labor Law to ban “no-fault” attendance policies by prohibiting employers from punishing employees or subjecting them to discipline for their lawful absences.  This law intends “[t]o ensure that it shall be retaliation for an employer to discipline workers by assessing point or deductions from a timebank when an employee has used any legally protected absence.”  The amendment take effect on February 19, 2023.

On August 10, 2022, an amendment to Colorado’s non-compete law, which sets stricter limits on employers and the potential for higher penalties, went into effect. H.B. 22-1317 amends Colorado’s existing law, following a recent trend to prohibit non-compete agreements for workers earning less than a certain salary threshold. Notable changes include increasing the penalty for violations to $5,000, prohibiting non-compete agreements for all employees who are not “highly compensated,” and prohibiting customer non-solicitation agreements for all employees making under a certain yearly salary. 

On July 27, 2022, Mayor Muriel Bowser signed the Non-Compete Clarification Amendment Act of 2022, which will become effective following a 30-day congressional review period. The Act will substantially amend D.C.’s ban on non-compete agreements, first passed by the City Council in early 2021 but delayed significantly since it was first enacted. 

Senator Elizabeth Warren (D-MA) and Representative Mondaire Jones (D-NY) introduced the “Prohibiting Anticompetitive Mergers Act” (S. 3847 and H.R. 7101), which, if enacted, would dramatically change the standards and processes for federal merger review across all sectors of the economy, giving the DOJ and FTC powers like those of—if not stronger than—the European Commission. The new bill is perhaps the most aggressive federal legislative proposal yet seeking to halt and reverse industry consolidation, highlighting concerns likely to impact ongoing negotiations on Capitol Hill regarding other pending antitrust legislation.

Some employers have historically used tracking devices on vehicles for various business purposes. As of April 18, 2022, New Jersey will require employers, before they make use of a tracking device on an employee-operated vehicle, to notify the employee. An Act Prohibiting Certain Employer Use of Tracking Devices, Assembly Bill No. 3950 (the “Act”), which was signed into law by New Jersey Governor Phil Murphy on January 18, 2022, will apply to all private employers in New Jersey. The Act defines a “tracking device” as an “electronic or mechanical device which is designed or intended to be used for the sole purpose of tracking the movement of a vehicle, person or device,” but does not include “devices used for the purpose of documenting employee expense reimbursement.” Importantly, the Act does not distinguish between employee-owned and employer-owned vehicles, but focuses instead on whether the vehicle is operated by an employee for business purposes.