Antitrust laws seek to promote competition, in part by preventing monopolies and concentrated market power and by prohibiting corporate collusion and price-fixing practices. Antitrust laws are regularly implicated by certain mergers and acquisitions.
Historically, antitrust enforcement has centered on consumer goods and services, with labor market protections emerging more prominently in the past 10 years. This shift reflects a more regulated approach to the economy, emphasizing fairness and equity.
On January 16, 2025, the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division (DOJ) issued joint antitrust guidelines, replacing the guidelines released in 2016.
The new guidelines, issued nearly a week before President Trump took office, outline specific practices that violate antitrust law, including non-compete agreements, no-poach agreements, and other restrictions on worker mobility.
The new guidelines emphasize the following key areas that potentially violate antitrust laws:
- Wage-fixing and no-poach agreements may violate antitrust laws and may lead to criminal charges.
- No-poach agreements between franchisees and franchisors may violate antitrust laws.
- Sharing of sensitive information, such as compensation and terms of employment, between competing companies, especially if it has an anti-competitive effect.
- Non-compete clauses that restrict workers from switching jobs or starting a competing business can violate antitrust laws.
- Agreements with overbroad non-disclosure agreements, training repayment agreements, non-solicitation agreements, and exit fee or liquidated damages provisions.
- False or misleading claims about workers’ potential earnings.
With the new guidelines in place, employers may need to revisit certain workforce management practices, including:
- Increased Compliance Obligations: Employers need to ensure that their hiring practices align with competition laws and avoid agreements that unduly and unfairly restrict job mobility. Employers should also review their related HR policies, employee handbooks, and other documents to ensure compliance.
- Enhanced Worker Protections: Employees have the right to report the violation of antitrust laws. They are also encouraged to seek transparency in compensation and job opportunities. This, too, is reason for every employer’s review of its HR policies, employee handbooks, and certain terms and conditions of contracts with employees and independent contractors.
- Potential Penalties: Violations can mean heavy fines and reputational damage.
Employers can ensure compliance with the new guidelines by following some practical steps.
- Audit policies: Conduct a comprehensive review of hiring and compensation strategies—this will help identify any potential antitrust risks.
- Train leadership: Educate HR and management teams on compliant practices.
- Consult Legal: Partner with a legal expert to make sure your business is up to date with evolving regulations.
The 2025 guidelines from the FTC and DOJ fall on the heels of the decision from a federal court in Texas striking down the FTC’s Final Rule banning most non-compete agreements. The guidelines make clear that various anti-competitive practices are, at least for now, a top priority for these agencies. Given that the guidelines were issued during the “lame duck period,” the time between the election and the inauguration of President Trump, the new administration may change course. Until then, employers beware.
If you have any questions about the applicability of the new guidelines to your organization, or if you need help reviewing and evaluating non-compete agreements and other restrictive covenants, let’s connect today.