Volume 58
Issue 0
Spring '21

Federal Criminal Prosecutions of Labor Market Restrictions: Small Cases with Big Implications

Written By: Theodore Salem-Mackall

Abstract

Historically, there has been a tension between antitrust and labor law. In an age of ongoing wage stagnation, however, this fractured relationship may be changing. Antitrust economists and practitioners are raising concerns about market concentration’s negative effects on real wages. As a result, the government has placed greater emphasis on prosecuting anticompetitive conduct practiced in labor markets. In 2016, the U.S. competition agencies—the Department of Justice’s Antitrust Division and the Federal Trade Commission—jointly announced that they viewed agreements among competitors to restrict competition in the purchase of labor services as per se illegal under the Sherman Act. Firms that entered explicit agreements with competitors to restrain competition in the purchase of labor services, such as through “no-poach” or wage-fixing agreements, could face criminal prosecution. 

Since, its announcement, the Antitrust Division emphasized its commitment to this policy in several speeches, and implied that criminal cases would be filed in 2018. Yet no cases materialized for some time. Then, in late 2020, the Division, for the first time ever, announced a criminal indictment related to anticompetitive agreements practiced within labor markets. Two other indictments related to separate agreements were filed in 2021. Notably, while the Division’s first articulation of the per se standard emerged from an investigation into “no-poach” agreements practiced by America’s largest firms, these conspiracies implicated a much smaller volume of commerce.

This Comment argues that, though these cases involve a small amount of money, they contain large implications for the future of antitrust law. Part I provides an overview of the law surrounding anticompetitive agreements in the labor context. Part II examines the Division’s 2010 shift to a per se standard in evaluating anticompetitive labor practices, such as “no-poach” and wage-fixing agreements. Part III argues that the use of criminal prosecutions against anticompetitive labor agreements is reasonable, and addresses counterarguments to this approach, and concludes with an exploration of how these cases raise more fundamental questions as to the underlying policies of modern antitrust. 

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