FTC and DOL Partner Up for Non-Compete Enforcement, Other Priorities

The Federal Trade Commission and the Department of Labor announced a new partnership to “protect workers from anticompetitive, unfair, and deceptive practices.” The partnership will particularly focus on misclassification, non-compete agreements, and other restrictive covenants. 

All of government approach, once again: In FTC Commissioner Lina Khan’s words: “This agreement...is part of our whole-of-government effort to protect workers from unlawful business practices...that suppress wages, reduce access to good benefits and working conditions, and stifle economic liberty for workers across the country.”

Enhanced enforcement: The memorandum of understanding outlining the partnership between the two agencies calls for increased collaboration and information sharing, cross-training for agency staff, and investigation partnerships, all for the purposes of better enforcement against employers. Areas of focus for the partnership include:

• Misclassification 
• Non-compete agreements and other restrictive covenants 
• Algorithmic decision-making 
• Training repayment agreement provisions
• Extent and impact of labor market concentration 
• Illegal claims and disclosures about earnings and costs associated with work

Why it matters: This is the latest cross-agency partnership within the Biden administration, including between the DOL, EEOC, FTC, NLRB, and the DOJ, intended to throw the full might of these agencies towards regulating and enforcing against employers. While the impact of these partnerships may be felt most behind the scenes, the consequences for employers can include being subject to multiple enforcement actions for the same issue or conduct as well as the FTC deciding it can and should ban non-compete agreements in nearly all cases.