DOL, FTC Partner Up on Employment Issues

Employment Law

The Department of Labor (DOL) and the Federal Trade Commission (FTC) have partnered to fight anticompetitive, unfair and deceptive practices in a new formal collaboration between the agencies.

In September, the DOL and the FTC signed a memorandum of understanding (MOU) aimed at bolstering the efforts of both agencies “to protect workers by promoting competitive U.S. labor markets and practices, as well as combat unfair methods of competition, that harm workers,” they announced.

The MOU outlines ways the agencies will work together on key issues such as labor market concentration, one-sided contract terms and labor developments in the gig economy, including sharing information, conducting cross-training and partnering on investigative efforts.

Areas of mutual interest for the two agencies include collusive behavior; the use of business models designed to evade legal accountability, such as the misclassification of employees; illegal claims and disclosures about earnings and costs associated with work; the imposition of one-sided and restrictive contract provisions, such as noncompete and training repayment agreement provisions; the extent and impact of labor market concentration; and the impact of algorithmic decision making on workers.

“Protecting workers on the job and promoting fair markets requires a level playing field,” Solicitor of Labor Seema Nanda said in a statement. “What’s unfair for workers is also unfair for law-abiding employers, and this partnership will help both of our agencies combat unlawful behavior, such as misclassification and contract provisions that restrict accessible opportunities to our growing workforce.”

Signed by FTC Chair Lina M. Khan and Acting Secretary of Labor Julie A. Su, the MOU provides another example of the trend of agency partnerships in the employment context.

The National Labor Relations Board and the Consumer Financial Protection Bureau also joined forces this year with an MOU intended to address “practices that harm workers in the ‘gig economy’ and other labor markets,” while the Equal Employment Opportunity Commission (EEOC) and the DOL’s Wage and Hour Division inked an MOU in September that features information sharing and complaint referrals between the agencies.

To read the DOL/FTC MOU, click here.

Why it matters

Employers should not be surprised to see an increase in enforcement efforts from the federal agencies, particularly on issues such as noncompetes (with the FTC already proposing a ban on such agreements earlier this year) and the gig economy, another area of interest for the FTC.  



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