Unpacking the Biden Administration’s Last-Minute Antitrust Worker Protections

POLICY STATEMENT ON LABOR EXEMPTION FOR INDEPENDENT CONTRACTORS

In a 3-2 vote along partisan lines, the FTC released a policy statement that clarifies the antitrust liability for independent contractors involved in labor organizing. This policy statement extends the exemption from antitrust liability for labor organizing and bargaining to independent contractors and gig workers. The FTC clarifies their position is that the formal classification of a worker as an “employee” or as an “independent contractor” does not affect their potential protection from antitrust liability if they are engaged in protected labor activities such as organizing and collective bargaining activity.

In the FTC’s open commission meeting on January 14, 2025, Commissioner Bedoya emphasized that labor organizing protections are rooted in the First Amendment and should not be dependent on whether somebody is paid on a 1099 or a W-2. Commissioner Slaughter referenced recent merger enforcement wins that proposed unionized labor as a plausible market for antitrust purposes as evidence that courts agree with such an interpretation. Commissioner Slaughter also expressed concern that the US Department of Labor, during President Trump’s first term, conducted rulemaking that ran counter to treating independent contractors similarly to employees. This may foreshadow how the FTC under the new Trump administration may view this policy statement.

Commissioners Ferguson and Holyoak, the former having been selected as the next chair of the FTC, issued a short dissent in which they did not address the substance of the policy statement. However, they raised strong reservations about the FTC making such a statement so close to the Biden-Trump changeover, lending uncertainty to the statement’s future. Although the FTC, under the new Trump administration, likely cannot succeed in taking formal action to repeal the statement, which was issued by a majority of the commissioners, until a third Republican commissioner is confirmed, this categorical dissent likely means that such a repeal may be in the future. Mark Meador has been nominated by President Trump as the third Republican commissioner, but he will need to proceed through the Senate confirmation process before taking office and creating a Republican majority.

GUIDELINES ON BUSINESS PRACTICES THAT IMPACT WORKERS

In another final act, the Biden FTC and DOJ replaced the 2016 Antitrust Guidance for Human Resource Professionals with new Guidelines on Business Practices that Impact Workers. The new guidelines lay out a list of agreements that “may” violate the law, including:

• Agreements between employers not to recruit, solicit, or hire workers, or to fix wages or terms of employment.
• Agreements between franchisors and franchisees not to poach, hire, or solicit workers.
• Exchanging competitively sensitive employment information among companies that compete for workers.
• Employment restrictions that restrict workers’ freedom to leave their jobs.
• Various potentially restrictive, exclusionary, or predatory employment conditions that harm competition, including overbroad nondisclosure agreements that effectively prevent a person from working in the same industry.

The guidelines generally do not provide clarity around the circumstances under which various conduct will be viewed as violating the law. Instead, they provide a list of things that “may” violate the law and “general principles” for analyzing such cases. As such, although they purport to be “guidelines,” they are not particularly useful in providing clarity around the government’s approach to analyzing the conduct at issue but are more a shot across the bow, listing the conduct that could be problematic. Their practical usefulness seems limited, and companies will need to look to case law to try to assess their exposure rather than taking guidance from them.

These guidelines were also released on a 3-2 vote along partisan lines. Commissioner Ferguson, again joined by Commissioner Holyoak, issued another scathing dissent. Although agreeing that the FTC has the responsibility to review and update its guidance, the dissent takes no position on the substance of the guidelines. Instead, the dissent, like that in the policy statement above, vehemently disagrees with the decision to take such an action in the waning days of the Biden administration, noting that it is inappropriate to release new guidance when “[t]he Biden-Harris FTC has no future.”

Therefore, the only certainty is that the 2016 Guidance for Human Resource Professionals is no longer in effect.

Recently, the Commission brought several cases aimed at protecting labor, including challenges to mergers of competing employers and cases involving other agreements among employers related to their labor practices, such as nonsolicit agreements. The Republican commissioners have supported some of those actions, so we expect that the Trump FTC will continue to pay attention to labor competition issues, but they will not be as progressive as the previous Democratic majority. Former FTC Chair Lina Khan announced she will leave the FTC in the coming weeks. Following that, the Commission will be split 2-2 on partisan lines until the fifth commissioner is confirmed, and it is unlikely the FTC will bring any novel enforcement actions under the new Guidelines on Business Practices that Impact Workers, but more mainstream labor theories will continue to be in play.

A majority is also needed to repeal the new guidelines, so repeal is unlikely in the near term. However, once the third Republican commissioner is seated, it appears highly likely that the FTC will review and potentially repeal or significantly alter these new guidelines, particularly given the Republican commissioners’ dissent.