This presentation by the US DOJ, was made during the discussion “Competition Concerns in Labour Markets” held at the 131st meeting of the OECD Competition Committee on 5 June 2019. More papers and presentations on the topic can be found out at oe.cd/cclm.

1. COMPETITION CONCERNS IN
LABOR MARKETS
OECD Competition Committee
June 5, 2019
Andrew C. Finch
Principal Deputy Assistant Attorney General
Antitrust Division, U.S. Department of Justice
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2. Labor Antitrust Concerns are about
Buyer Power
• Exercised by buyer against seller of a good or service
• Decreased competition for workers  reduced wages,
benefits, and other terms of employment
• Anticompetitive agreements can create or enhance
monopsony power
• Mergers can enhance incentive and ability of merged
firms to cut back on input to drive down prices paid
or increase bargaining leverage
– Threat of reduced purchases can lower input prices
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3. Potential Anticompetitive Conduct
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• No-Poach Agreement
– agreement between employers not to compete for employees
• Wage-Fixing Agreement
– agreement between employers that sets worker wages,
benefits, other terms of employment at specific level or range
• Non-Compete Agreement
– vertical agreement between employer and current or former
employee
• Information exchanges
– purpose or effect of exchange is to facilitate collusion about
hiring or compensation decisions

4. Potential Anticompetitive Conduct
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EMPLOYEES
Employer
Non-Compete
Employer
Employer

5. DOJ Enforcement in Labor Markets
• United States v. Utah Society for Healthcare Human
Resources Administration (1994): DOJ alleged a group of
HR professionals at Utah hospitals conspired to exchange
non-public prospective and current wage information
about registered nurses
– exchange caused hospitals to match each other’s wages
– kept pay of registered nurses in Salt Lake County artificially low
• United States et al. v. Arizona Hospital & Healthcare
Association (2007): DOJ alleged a group acting on behalf
of Arizona hospitals set uniform rate schedule that they
would pay for temporary and per diem nurses
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6. DOJ Enforcement in Labor Markets
• United States v. Adobe et al. (2010) – DOJ alleged Adobe,
Apple, Google, Intel, Intuit, and Pixar entered into per se
unlawful no-poach agreements
• United States v. Lucasfilm (2010) – DOJ alleged Lucasfilm
entered into per se unlawful agreement with Pixar not to
cold-call employees
– Pixar previously settled with DOJ
• United States v. eBay (2012) – DOJ alleged eBay entered
into per se unlawful no-poach agreement with Intuit
– EBay settled litigation and entered into consent decree after losing
motion to dismiss
– Intuit previously settled with DOJ
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7. Criminal Prosecution of Naked No-Poach
and Wage-Fixing Agreements
• October 20, 2016: DOJ and FTC issued the Antitrust Guidance to
Human Resources Professionals
• Guidance advises that, going forward, the DOJ intends to
proceed criminally against naked no-poach and wage-fixing
agreements
• Beginning in October 2016, Division made a number of public
statements that it intends to criminally prosecute naked no-
poach and wage-fixing agreements that began or continued after
October 2016
• Public statements intended to provide additional clarity
regarding enforcement intentions going forward
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8. Recent Enforcement
• United States v. Knorr-Bremse AG and Westinghouse
Air Brake Technologies (2018): DOJ alleged Knorr and
Wabtec entered into per se unlawful no-poach agreements
– DOJ alleged agreements went back to at least 2009
– Alleged agreements enforced by senior executives
– Knorr and Wabtec each had similar no-poach agreements with
Faiveley Transport (merged with Wabtec in 2016)
– DOJ resolved concerns by civil action because agreements
terminated before October 2016
– Settlement included seven-year injunction; cooperation obligation
in future investigations; and requirement to notify all U.S.
employees, recruiters, and rail industry at large of settlement and
its obligations
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9. Recent Advocacy
• In re Railway Indus. Emp. No-Poach Antitrust Litig. (W.D. Pa.
Feb. 8, 2019)
– Class action follow-on to United States v. Knorr-Bremse AG et al.
– Statement of Interest: per se rule for naked no-poach agreements
• Seaman, et al. v. Duke University et al. (M.D.N.C. March 7, 2019)
– Statement of Interest: per se rule for naked no-poach agreements
and no ipso facto immunity for Duke
– DOJ later intervened in action for purpose of enforcing any
injunctive relief entered by the Court
• Fast-Food Franchise No-Poach Cases (E.D. Wa. March 8, 2019)
– Cases filed by former employees against fast-food franchisors
– Plaintiffs alleged franchise agreement prohibits franchisees from
soliciting or hiring employees of other franchisees or the franchisor
– Statement of Interest: franchisor and franchisee are legally capable
of conspiring under § 1 and rule of reason applies to most no-poach
agreements imposed by franchisor on its franchisees 9

10. Merger Review and Labor Markets
• Labor Monopsony Theory of Harm: effect of proposed merger may be
substantially to lessen competition in a defined labor market
– Market definition focuses on alternative employers available to workers in response to a
small but significant decrease in wages paid by hypothetical monopsonist
– Relevant market geographically bounded if geography limits some workers’ willingness
or ability to switch employers
– Horizontal Merger Guidelines have recognized theory since at least 1982
• 2010 Horizontal Merger Guidelines: buy-side effects analysis need not
be based on effects in downstream market in which merging firms compete
– Buy-side competitive effects analysis employs similar framework as that used to evaluate
sell-side competitive effects
• Examples of DOJ Enforcement:
– Aetna/Prudential (1999)
– UnitedHealth Group/Pacificare (2005)
– Blue Cross Blue Shield of Michigan/Physicians Health Plan of Mid-Michigan (2010)
– Anthem/Cigna (2016)
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