FTC Labor Market Task Force: A Surprising Continuation of Biden-Era Priorities

The FTC framed labor market concerns as central to its dual mandate to protect people from both deceptive practices and unfair methods of competition. More generally, Chair Ferguson has stated that enforcement against unlawful labor market practices that serve to suppress wages is an important tool to alleviate the effects of inflation on prices of goods. The FTC identified specific enforcement targets, including no-poach, non-solicitation, and no hire agreements, wage-fixing, noncompete agreements, and potential collusion on DEI metrics. The FTC explicitly categorizes these practices as “unfair methods of competition,” indicating that it intends to leverage Section 5 of the FTC Act for enforcement. Section 5 is designed to address conduct that harms competition but may not meet the stricter requirements of the Sherman Act, serving as a gap-filling provision in antitrust enforcement.

Additionally, the FTC underscored deceptive practices such as misleading job advertisements and fraudulent franchise offerings, expanding the scope of scrutiny beyond competition concerns. Chair Ferguson calls for the various FTC Bureaus to harmonize their methods and procedures, create an information-sharing protocol, promote research on harmful labor market conduct, and engage in public outreach on the issues.

In deciding to prioritize labor enforcement, Chair Ferguson marks a notable shift from his previous opposition to the Biden-era FTC’s noncompete ban. The FTC proposed a rule banning nearly all non-compete agreements with workers in early 2023, finalizing it in spring of 2024 over the dissents of then-Commissioner Ferguson and Commissioner Holyoak. A federal district court ultimately set aside the rule after finding that the FTC had exceeded its statutory authority in implementing it, and that the rule was arbitrary and capricious. The FTC has appealed that decision to the U.S. Court of Appeals for the Fifth Circuit. The previous administration also made repeated attempts to prosecute no-poach agreements in cases filed in Texas, Colorado, and Maine, though all three cases were defeated in court.

In addition to conduct cases, Chair Ferguson signaled that labor issues would remain a focus of the agencies’ merger reviews. In February, Chair Ferguson announced that the 2023 Merger Guidelines will remain in effect, which explicitly consider the impact of a merger on labor markets.

For businesses, the FTC’s formation of the Joint Task Force indicates that labor market practices, including noncompete and no-poach agreements, will remain a key area of regulatory scrutiny. To reduce exposure to labor market competition enforcement risks, companies should refresh existing compliance programs, and ensure that such programs address not only traditional antitrust risks but also the expanded focus on DEI, and on unfair and deceptive labor practices.

¹ The Joint Task Force will consist of the Directors of the FTC’s Bureaus of Competition, Consumer Protection, and Economics, and the Office of Policy Planning.