The pro-labor shift under the current administration continues to push forward. We previewed the anticipated changes that could reshape labor policy and law and were foreshadowed in General Counsel Jennifer Abruzzo's agenda for the National Labor Relations Board (NLRB). Recent developments point to a potentially farther-reaching impact on employers as the pro-employee, pro-labor push expands to other federal agencies and fields outside the traditional employment setting.
Recently, the Federal Trade Commission (FTC) gave us a preview of how the Biden administration's pro-labor push is extending into the policy agendas of other federal agencies. In a letter to the House Antitrust Subcommittee on September 28, 2021, FTC Chair Lina Khan outlined certain anticipated FTC enforcement and/or rulemaking efforts that seek to regulate labor markets. Khan's letter identifies three areas of change.
First, Khan announced that the FTC now plans to scrutinize mergers to assess their potential impact on labor markets. This means that the FTC will evaluate a merger's perceived monopsony effects (i.e., a market that is dominated by one or a few buyers) and the merger's effects on the power dynamic relative to large employer entities and on workers, including "deceptive" pay practices.
Second, Khan has directed FTC staff to scrutinize whether certain contract terms, including non-compete provisions, harm workers, especially when provided to workers in so-called take-it-or-leave-it contexts. Khan advised that the FTC will pursue both law enforcement and possibly rule-making to address these contract provisions.
Third, Khan's letter contemplates the FTC working with the Department of Justice (DOJ) to afford workers greater freedom in labor organizing. Noting that existing law (Section 6 of the Clayton Act) exempts "employee" labor organizing from antitrust regulation, Khan asserts the need to afford non-employees similar protection and proposes the FTC will (i) assist courts in viewing the Clayton Act in a way that exempts non-employee worker organizing activities from antitrust enforcement actions; and (ii) encourage Congress to pursue legislation that would grant "workers" greater protections under antitrust laws, including exempting certain labor organizing from the scope of federal antitrust laws. Underscoring that the DOJ also will be focused on labor issues, the nominee to lead the DOJ's Antitrust Division testified at his confirmation hearing on October 7 that protecting workers against monopsony power will be a primary goal of his tenure.
Additionally, as anticipated, the NLRB is beginning its effort to expand protections to new classes of workers. In a September 29, 2021 memo to NLRB regional offices, Abruzzo announced that student-athletes at private colleges and universities meet the definition of employees under the National Labor Relations Act. This position is a return to an Obama-era position that was rescinded under the Trump administration in 2017. Once again, the NLRB's position now provides student-athletes with statutory protection, including Section 7 rights to engage in concerted activities relating to their terms and conditions of employment. Abruzzo's memo contemplates that "in appropriate circumstances" the NCAA or other athletic conferences may even face liability as joint employers. Consonant with Khan's letter of the day before, Abruzzo grounds this expansion of labor protections partly in antitrust principles, noting that the Supreme Court's recent decision in NCAA v. Alston unanimously held the NCAA's rules limiting education-related benefits for student-athletes violate antitrust law.
These pronouncements suggest a shift warranting consideration by businesses regarding mergers and interactions with employees and at least some non-employee workers. We will continue to monitor labor policy and law developments that impact employers. If you have any questions about the NLRB or labor relations, please contact the authors of this article.