DOJ and FTC Issue New Antitrust Guidelines for Business Activities Affecting Workers

On January 16, 2025, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) issued new Antitrust Guidelines for Business Activities Affecting Workers (the Guidelines), replacing the agencies’ 2016 Antitrust Guidance for Human Resource Professionals (the 2016 HR Guidance). The Guidelines continue DOJ’s focus on no-poach, wage-fixing, and information-sharing agreements and FTC’s focus on non-compete agreements. However, the Guidelines go beyond the 2016 HR Guidance by addressing non-disclosure agreements, hiring restrictions in franchise agreements, non-solicitation agreements with employees, training repayment agreements, exit fee and liquidated damages agreements, and false earnings claims.

Announced just days before President Donald Trump’s inauguration, the Guidelines drew dissents from Commissioner (and incoming FTC Chair) Andrew Ferguson and Commissioner Melissa Holyoak.¹ However, Ferguson’s dissent focused on the timing of the Guidelines’ issuance, and he reiterated that “antitrust laws protect employees from unlawful restraints of the labor markets.”² It is also worth noting that DOJ actively pursued labor-market antitrust cases during the first Trump administration, including bringing the first criminal cases alleging criminal wage-fixing and no-poach agreements.³ Thus, it is not a given that the second Trump administration will be more lenient on labor-market antitrust issues, particularly the issues addressed in the 2016 HR Guidance. The fate of the new issues raised in the Guidelines may be more uncertain.

According to the Guidelines, the following types of agreements or business practices may violate the antitrust laws and potentially trigger criminal or civil liability:

1. No-Poach and Wage-Fixing Agreements

No-poach: Agreements between businesses not to recruit, solicit, hire, and/or otherwise compete for current, former, or potential workers may violate antitrust laws. These no-poach agreements need not completely prohibit hiring another company’s workers to violate the law. Any agreement to restrict a company’s ability to hire another company’s workers, such as an agreement not to “cold call” another company’s workers or to require permission from the current employer before hiring an employee, may constitute an unlawful no-poach agreement.⁴

Wage-fixing: Agreements between businesses concerning workers’ salaries or other terms of compensation, such as bonuses, benefits, or other terms of employment, similarly may violate antitrust laws. Any agreement to a range, ceiling, minimum, or benchmark for calculating wages qualifies as a legally suspect wage-fixing agreement. It does not matter whether the agreement is informal, unwritten, unspoken, direct, or through a third party; such agreements may be unlawful.

These issues were the focus of the 2016 HR Guidance, and the Guidelines take a consistent approach. Importantly, despite suffering setbacks at criminal trials following the 2016 HR Guidance, the Guidelines reiterate that such agreements may be subject to criminal liability. And as a per se offense, no showing of actual harm (such as lower wages) is required to prove an antitrust violation.

2. Franchise No-Poach Agreements

Agreements between franchisors and franchisees not to compete for workers can still be per se unlawful despite the existence of a vertical business relationship between them. Moreover, a franchisor may violate antitrust laws by organizing or enforcing a no-poach agreement among its franchisees. No-poach agreements between franchisor and franchisee, or between franchisees of the same franchisor, may also be prohibited by state law⁵ and have been a focus of recent antitrust litigation.⁶

3. Sharing Competitively Sensitive Information

Sharing competitively sensitive information with competitors — such as terms and conditions of employment, compensation, or benefits — may violate antitrust laws “when the information exchange has, or is likely to have, an anticompetitive effect.”⁷ Companies need not directly share competitively sensitive information to violate the law. Sharing competitively sensitive information indirectly through an intermediary, such as an algorithm, software program, or a third party, may also be unlawful.

Information-sharing agreements that are ancillary to a broader business collaboration and are “reasonably necessary to achieve the procompetitive potential of that collaboration” may require a “fuller analysis of their effects” before being deemed unlawful.⁸ Unsurprisingly, the agencies have taken a narrow view on this issue.[[N: Brief for the United States of America and the Federal Trade Commission as Amici Curiae in Support of Neither Party, Deslandes v. McDonald’s USA LLC, Nos. 1:17-cv-04857, 1:19-cv-05524 (7th Cir. 2023) (“[a] restraint does not qualify as ancillary merely because it accompanies some other agreement that is itself lawful”). ]] The new Guidelines, however, do not provide much guidance on what types of ancillary agreements might be deemed reasonably necessary to a legitimate collaboration and therefore lawful.

4. Non-Compete Clauses in Employment Contracts

Employment contracts that restrict workers from seeking alternative employment or from starting a competing business may also violate antitrust laws. DOJ has taken the position that an employee non-compete may be a per se violation of the Sherman Act where the employer and employee are potential competitors.⁹ Consequently, in one corporate criminal resolution, DOJ required the company to agree to release current and former employees from non-compete obligations.¹⁰

Similarly, FTC has taken the position that such agreements may violate Section 5 of the FTC Act as an unfair method of competition and has passed a rule prohibiting non-compete agreements.¹¹ Although enforcement of the rule has been enjoined pending appellate review, FTC may continue to pursue non-competes on a case-by-case basis.¹² For example, FTC has required merging parties to cease using, enforcing, or entering into non-compete agreements.¹³

5. Other Employment Conditions That Create Enforcement Risk

The agencies warn that they may also scrutinize or take action against any agreements that “impede worker mobility or otherwise undermine competition.”¹⁴ The wide scope for potential liability includes:

• Employee non-disclosure agreements
• Training repayment agreements
• Non-solicitation agreements with employees
• Exit fee and liquidated damages agreements
• False earnings claims by employers

These activities historically have not given rise to antitrust liability. Accordingly, while the legality of such agreements is ultimately fact-specific, any agreement that discourages workers from seeking or accepting other work or starting a business may draw scrutiny under the Guidelines.

Guidelines Also Apply to Independent Contractors

The Guidelines state that the laws prohibiting anticompetitive conduct directed at workers also apply to independent contractors. Interestingly, this guidance comes two days after FTC issued a policy statement stating that “independent contractors, including gig workers, are shielded from antitrust liability when engaging in protected bargaining and organizing activities — such as seeking better compensation and job conditions.”¹⁵ Taken together, the Guidelines and the FTC’s policy statement suggest that independent contractors acting collectively may be shielded from antitrust liability, but those who employ them are not.

Takeaways

• Companies should update compliance programs to include training and education on the types of activities covered by the Guidelines.
• Companies should review form or template agreements, including employment contracts, severance agreements, and franchise or vendor agreements, that may contain provisions subject to the Guidelines.
• Companies should remain alert to decisions by the new Trump administration to modify the agencies’ approach to the Guidelines.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.