Last Friday President Joseph Biden clearly signaled that his administration intends to turn up the heat on antitrust enforcement, signing an ambitious and wide-ranging Executive Order on Promoting Competition in the American Economy (the “Executive Order”). The Executive Order includes 72 recommendations involving a dozen federal agencies, touching on (among other things) post-transaction review of “prior bad mergers” permitted by previous administrations, the “potential for anticompetitive market power beyond the scope of granted patents,” potential abuse of standards-setting processes, and non-compete agreements.
In one potentially significant section, the Executive Order directs the Department of Justice (DOJ) and Federal Trade Commission (FTC) to reconsider and potentially revise the Antitrust Guidance for Human Resources Professionals document that the DOJ and FTC jointly issued in 2016 (the “HR Antitrust Guidelines”), with the goal of “better protect[ing] workers from wage collusion.” This appears to be a shot at the long-standing guidance permitting employers to conduct industry-specific wage and benefit surveys as long as the information was: (1) gathered by a neutral third party; (2) historical in nature; and (3) aggregated in a way that made it difficult or impossible to identify specific contributors to the survey.
Additionally, the Executive Order directs the FTC to consider using its “statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” The Executive Order contains no indication of whether the FTC will differentiate between types of non-compete agreements (employer-employee v. business to business) or touch on other related employment agreements such as confidentiality or non-solicitation agreements.
Although it remains to be seen precisely how the involved federal agencies will implement the policy directions called for in the Executive Order, it appears virtually certain that a new age of more aggressive antitrust enforcement and competition policy is upon us. If you have questions about best practices in dealing with this evolving regulatory landscape, please contact Brian Masternak, Scott Carvo or a member of Warner’s Labor and Employment Practice Group.