COVID-19 Update: Beware of cooperation in the labor market
The U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) recently issued a joint statement alerting employers that the agencies intend to protect competition for workers by “enforcing the antitrust laws...in labor markets.” The agencies acknowledged that the COVID-19 public health emergency might require cooperation among businesses in order to protect health and safety, but they made clear that coordination between competitors in ways that could negatively impact employees’ wages, benefits, hours or any other term of employment could be pursued as possible antitrust violations. Such protections also extend to hiring, recruiting and retaining employees.
Hospitals may be among those businesses that could cooperate with a competitor in limited and specific procompetitive situations. For example, cooperation aimed at addressing clinical issues related to the ongoing public health emergency may be permissible. While the agencies acknowledged that providers and other companies have “demonstrated extraordinary compassion and flexibility in responding to COVID-19,” they also acknowledged that there are limits to permissible cooperation, which must be strictly observed.
Those limits prohibit anticompetitive coordination among competitors in any market in which they compete, including the labor market. It is especially important to monitor all activities involving a competitor to ensure those activities are not only permissible under the antitrust laws but also, if they are permissible, that those activities do not “spillover” into impermissible areas. The DOJ and FTC have now made clear that coordination in the labor market is one of those areas that could run afoul of the antitrust laws.
This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.Download PDF