The Federal Trade Commission is joining with the National Labor Relations Board (NLRB) in a new agreement that will bolster the FTC’s efforts to protect workers by promoting competitive U.S. labor markets and putting an end to unfair practices that harm workers. The new memorandum of understanding between the two agencies outlines ways in which the Commission and the Board will work together moving forward on key issues such as labor market concentration, one-sided contract terms, and labor developments in the “gig economy.”
“I’m committed to using all the tools at our disposal to ensure that workers are protected from unfair methods of competition and unfair or deceptive practices,” said FTC Chair Lina M. Khan. “This agreement will help deepen our partnership with NLRB and advance our shared mission to ensure that unlawful business practices aren’t depriving workers of the pay, benefits, conditions, and dignity that they deserve.”
“Workers in this country have the right under federal law to act collectively to improve their working conditions. When businesses interfere with those rights, either through unfair labor practices, or anti-competitive conduct, it hurts our entire nation,” said NLRB General Counsel Jennifer A. Abruzzo. “This MOU is critical to advancing a whole of government approach to combating unlawful conduct that harms workers.”
The new agreement enables the FTC and the NLRB to closely collaborate by sharing information, conducting cross-training for staff at each agency, and partnering on investigative efforts within each agency’s authority. The FTC is responsible for combatting unfair and deceptive acts and practices and unfair methods of competition in the marketplace. The NLRB is responsible for protecting employees from unfair labor practices which interfere with the rights of employees to join together to improve their wages and working conditions, to organize a union and bargain collectively, and to engage in other protected concerted activity.
The MOU identifies areas of mutual interest for the two agencies, including the extent and impact of labor market concentration; the imposition of one-sided and restrictive contract provisions, such as noncompete and nondisclosure provisions; labor market developments relating to the “gig economy” and other alternative work arrangements; claims and disclosures about earnings and costs associated with gig and other work; the impact of algorithmic decision-making on workers; the ability of workers to act collectively; and the classification and treatment of workers.
The agreement is part of a broader FTC initiative to use the agency’s full authority, including enforcement actions and Commission rulemaking, to protect workers. The FTC has made it a priority to scrutinize mergers that may harm competition in U.S. labor markets. Research shows that these markets are already highly concentrated, and less competitive labor markets can enable firms to harm workers by lowering wages, reducing benefits, and perpetuating precarious or exploitative working conditions. The FTC is working with the Department of Justice to update the agencies’ merger guidelines, looking to provide guidance on how to analyze a merger’s impact on labor markets.
The FTC has also prioritized cracking down on anticompetitive contract terms that put workers at a disadvantage by leaving them unable to negotiate freely over the terms and conditions of their employment. The agency is scrutinizing whether some of these contract terms, particularly in take-it-or-leave-it contexts, may violate the law. At recent open Commission meetings the agency has heard concerns about noncompete clauses that have been imposed on some workers, and as a result it has opened a docket to solicit public comment on the prevalence and effects of contracts that may harm fair competition. It already has taken action to protect workers in several Commission orders, including:
- Prohibiting 7-Eleven from enforcing anticompetitive noncompete agreements last year as part of an order remedying competition concerns stemming from 7-Eleven, Inc’s acquisition of Marathon’s Speedway subsidiary; and
- Prohibiting dialysis services provider DaVita, Inc. from imposing undue restrictions on kidney dialysis worker mobility as part of another FTC order remedying competitive concerns with from DaVita’s proposed acquisition of the University of Utah Health’s dialysis clinics.
In addition, the agency will continue to take action to stop deceptive and unfair acts and practices aimed at workers; particularly those in the “gig economy” who often don’t enjoy the full protections of traditional employment relationships. The FTC’s actions in this area include:
- Suing Amazon in 2021 for illegally withholding more than $61 million in tips from drivers for its Amazon Flex program. In that case, the FTC alleged that Amazon had made numerous promises to its drivers that they would receive 100 percent of their tips, but actually withheld tip money from its drivers for years. Amazon agreed to an FTC order requiring them to surrender the full amount owed, which the FTC paid to affected drivers;
- Suing Uber in 2017 for making deceptive earnings claims to potential drivers as well as deceiving them about the terms of a vehicle leasing program. The FTC alleged that the company touted median income levels in various cities that were greatly exaggerated and advertised lease and purchases prices lower than the prices actually available. Uber agreed to a federal court order requiring them to surrender $20 million that the FTC used to compensate drivers;
- Launching a proceeding to challenge bogus money-making claims used to lure consumers, workers, and prospective entrepreneurs into risky business ventures that often turn into dead-end debt traps;
- Putting more than 1,100 businesses that pitch money-making ventures on notice that if they deceive or mislead consumers about potential earnings, the FTC won’t hesitate to use its authority to target them with large civil penalties;
- Suing online lead seller HomeAdvisor, Inc., alleging it used deceptive and misleading tactics in selling home improvement project leads to service providers, including small businesspeople operating in the “gig” economy; and
- Suing fast-food chain Burgerim, accusing the chain and its owner of enticing more than 1,500 consumers to purchase franchises using false promises while withholding information required by the Franchise Rule.
Workers who believe that their labor rights have been violated can call 1-844-762-6572 for assistance filing an unfair labor practice charge. Or they can contact their closest NLRB Field Office or submit a charge on the NLRB’s website.
The memorandum of understanding was signed by FTC Chair Lina M. Khan and NLRB General Counsel Jennifer A. Abruzzo.
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