Tuesday, May 11, 2021
1. Introduction
Labor market concentration and its potential effects on workers is a topic increasingly debated among antitrust practitioners and academics. The potential link between labor market concentration and lower wages has led to questions of whether and how labor issues should inform merger review and, more broadly, antitrust investigations. Covid-19 has strained some industries (such as airlines) and may result in consolidation of some employers, further raising labor market concentration concerns. This article describes some of the current research regarding labor concentration and its impact on workers, how labor concentration issues are being raised in the courts, and how economic analysis can inform antitrust inquiry moving forward.
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In 2016, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) issued Joint Guidance for Human Resource Professionals warning that no-poach agreements restricting employee hiring may violate the antitrust laws.[1] That guidance, along with pre-guidance litigation, has established some clear ground rules. Naked no-poach agreements are per se illegal under §1 of the Sherman Act,[2] while ancillary no-poach agreements, those related to legitimate, procompetitive joint ventures[3] and corporate acquisitions,[4] are subject to the rule of reason, which considers whether the agreement is, on balance, anticompetitive.
Yet, four years later, there remain stubborn pockets of disagreement for example, no-poach clauses in franchise agreements. Federal courts are struggling to reach a consensus on how to analyze them under the antitrust laws. And there’s a lot at stake. Statistics show more than 8 million American