Competition Corner

Antitrust scrutiny of labor markets is far from dead.  Despite the FTC and DOJ Antitrust Division suffering several prominent defeats of major labor antitrust initiatives in recent years—including courts blocking the FTC’s rule banning non-competes and juries rejecting DOJ no-poach prosecutions—the agencies continue to pursue a variety of labor-focused actions.

The FTC recently appealed a Texas federal court’s decision from August to block the implementation of the FTC’s rule banning worker non-competes.

The Federal Trade Commission’s rule banning nearly all noncompete agreements with workers was blocked, nationwide, by a Texas federal court on August 20.

A federal district court in Texas granted a preliminary injunction staying enforcement of the Federal Trade Commission’s recently adopted rule banning nearly all non-competes with workers. The decision is strongly critical of the FTC rule and finds that the plaintiffs are substantially likely to succeed in their challenge to the non-compete ban on the basis that the rulemaking was beyond the FTC’s statutory authority and was arbitrary and capricious. 

On April 23, 2024, the U.S. Federal Trade Commission promulgated a final rule banning non-compete clauses in contracts with employees and other workers (the Rule). 

On July 31, 2023, China’s antitrust law enforcement agency, the State Administration for Market Regulation (SAMR), summoned four hog-farming companies for a regulatory meeting, with concerns over a no-poach agreement among them.

Last year, we previewed the Department of Justice’s antitrust lawsuit seeking to block Penguin Random House’s purchase of its competitor, Simon & Schuster, as a prominent example of the DOJ’s recent increased focus on monopsony theories of competitive harm.  After a year of litigation, the case reached resolution in November, when U.S. District Court for the District of Columbia (now D.C. Circuit) Judge Florence Pan issued a decision enjoining the merger, determining it would lessen competition in the market to acquire publishing rights and therefore violated Section 7 of the Clayton Act.  

On January 5, the Federal Trade Commission released a Notice of Proposed Rulemaking (NPRM) to prohibit employers from imposing most non-compete clauses on workers. The proposed rule is the current FTC’s most significant attempt yet at utilizing antitrust enforcement and administrative rulemaking to increase competition in labor markets. If finalized and upheld against likely court challenges, the rule would significantly impact businesses throughout the country.

Winston & Strawn’s Women in Antitrust limited podcast series continues with a new episode focusing on the world of sports. Partner and host Diana Leiden pitches some curve balls to two other talented partners who have been involved in groundbreaking sports antitrust decisions—Law360 Sports & Betting Rising Star Jeanifer Parsigian and Crain’s New York Business’s Notable Woman in Sports Angela Smedley—on the MLB’s antitrust exemption, the impact of Alston v. NCAA, and potential legislation challenging the status quo.

The ABA and IBA hosted the 2022 International Cartel Workshop in Lisbon, Portugal, over three days in late June. The biennial workshop is considered the premier international cartel conference, and was attended by senior members of the private bar and government enforcers from around the world, including several members of Winston’s Antitrust/Competition Group.

In the latest interagency collaboration, the FTC and National Labor Relations Board (NLRB) entered into a memorandum of understanding last week aimed at rooting out practices that harm workers in the gig economy and other labor markets, enhancing enforcement administered by the agencies and promoting interagency collaboration and outreach to protect workers against unfair methods of competition and labor practices.

On June 14, 2022, the Federal Trade Commission (“FTC”) announced that it had required ARKO Corp. and its subsidiary GPM to roll back certain provisions of their acquisition of 60 Express Stop retail fuel outlets from Corrigan Oil Company, including limiting a broad non-compete provision.

The Department of Justice (“DOJ”) and Federal Trade Commission (“FTC”) hosted a two-day virtual workshop on December 6 and 7 titled “Making Competition Work: Promoting Competition in Labor Markets.” The agencies had previously been tasked by President Biden’s “Executive Order on Promoting Competition in the American Economy” (the “Executive Order”) with addressing economic competition in labor markets. Among other priorities, the Executive Order called on the agencies to collaborate in assessing ways to promote worker mobility and address imbalances in labor markets as well as to update previous guidance in the area.

The Eastern District of Texas denied Neeraj Jindal’s and John Rodgers’ motions to dismiss the Department of Justice’s (“DOJ”) first-ever criminal indictment for wage-fixing. The court found that wage-fixing agreements were a type of price-fixing and, as such, rejected defendants’ arguments that there was a lack of precedent to criminally prosecute the alleged conduct as per se illegal.

On November 2, the U.S. Department of Justice (DOJ) filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia, seeking to halt the world’s largest book publisher, Penguin Random House, from acquiring its competitor, Simon & Schuster. The case represents the most recent and high-profile example of the DOJ’s focus on monopsony theories of competitive harm.

On August 19, 2021, a Ninth Circuit panel confirmed that a full rule-of-reason analysis—as opposed to the more truncated per se treatment—applies to non-solicitation provisions in otherwise procompetitive collaborative agreements. 

In the fast-developing area of no-poach antitrust law, two courts have recently denied class certification bids for former Jimmy John’s and McDonald’s employees in their respective no-poach suits alleging that the chains’ franchise locations were prohibited from recruiting one another’s workers.

What impacts will the sweeping Executive Order on Promoting Competition have on companies? In this episode of Winston & Strawn’s Competition Corner Podcast, Attorneys Molly Donovan, David Dahlquist, Susannah Torpey, and Kevin Goldstein discuss the Order’s directives and recommendations targeting labor markets, the tech sector, and the healthcare and life sciences industries.

On July 9, 2021, President Biden issued the “Executive Order on Promoting Competition in the American Economy,” aimed at promoting economic competition and the interests of workers through the enforcement of antitrust laws, and the White House issued a corresponding “Fact Sheet” providing additional details behind the Order.

On July 9, 2021, President Biden signed a comprehensive Executive Order aimed at promoting economic competition across the U.S. economy including through enhanced enforcement of antitrust laws.