Update Applicable to:	Effective Date
All Covered Employers and Independent Contractors	See Details Below

What happened?

On January 16, 2025, the Department of Justice (DOJ) Antitrust Division and the Federal Trade Commission (FTC) released the Antitrust Guidelines for Business Activities Affecting Workers, replacing the 2016 Antitrust Guidance for Human Resource Professionals.

Overview:

The new guidelines clarify how the DOJ and FTC assess whether business practices affecting workers violate antitrust laws.

• Protection of Competition: Competition among employers benefits workers through better wages, benefits, and working conditions.

• Prohibited Practices: Wage-fixing agreements, non-compete clauses, and sharing wage information among competing companies may violate antitrust laws.

• Criminal Liability: Agreements to fix wages or not to poach employees can lead to criminal liability.

• Reporting Violations: Information on reporting potential antitrust violations to the FTC and DOJ is provided.

The guidelines state that laws prohibiting anticompetitive conduct directed at workers also apply to independent contractors.

Additional Information:

Updated Guidance Summary

1) General Principles: The guidelines emphasize several key principles:

• Implicit Agreements: Agreements do not need to be explicit or written to violate antitrust laws. Informal agreements can also be problematic.

• Labor Market Restraints: The per se rule and rule of reason apply to labor market restraints. Some agreements are illegal regardless of their effects, while others require deeper analysis.

• Competitors for Workers: Businesses can be competitors for workers even if they provide different products or services.

• Independent Contractors: The antitrust laws apply to agreements involving independent contractors, especially with the rise of technology platforms.

2) Activities That May Violate Antitrust Laws: The guidelines identify several activities that may constitute antitrust violations:

• Noncompete Clauses: These clauses restrict workers from switching jobs or starting competing businesses and can harm competition.

• Nonsolicitation and Nondisclosure Clauses: These clauses can prevent workers from seeking other employment or starting businesses.

• Training Repayment and Exit Fee Agreements: Agreements that require workers to pay penalties for leaving their employer can impede worker mobility.

• False Earnings Claims: Businesses making false or misleading claims about potential earnings may be investigated and acted upon by the FTC and DOJ.

3) Wage-Fixing and No-Poach Agreements: Wage-fixing and no-poach agreements between competing businesses can violate antitrust laws, even if they do not result in actual harm. The DOJ may pursue criminal charges, and civil liability is also possible.

4) Sharing Information About Wages and Employment Terms: Sharing competitively sensitive compensation or employment information among employers can be a potential violation if it has an anticompetitive effect. This includes providing such information through algorithms or third-party tools.

5) Franchise No-Poach Agreements: Agreements between franchisors and franchisees not to compete with workers can be unlawful. The DOJ and FTC have filed amicus briefs in private actions arguing that no-hire or no-solicitation provisions can be horizontal agreements and, per se, illegal unless they qualify as ancillary restraints.

6) Future of the Guidelines: The new guidelines offer broader statements about potential violations and expand coverage to employee contracts. Whether the current administration will revise or withdraw these guidelines remains to be seen.

7) Guidelines Also Apply to Independent Contractors: independent contractors acting collectively may be shielded from antitrust liability, but those who employ them are not.

Source References

• DOJ & FTC – Antitrust Guidelines for Business Activities Affecting Workers (Revised January 2025)
• DOJ and FTC Joint Press Release: Guidance Revision 2025

Resources

• Previous Guidance: DOJ & FTC – Antitrust Guidance for Human Resource Professionals (Oct. 2016) (HR Guidance)

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