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US FTC Continues Focus On Gig Economy With NLRB Agreement – Employee Rights/ Labour Relations



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In its latest foray into labor practices, on July 19, 2022, the
Federal Trade Commission (FTC) signed a memorandum of understanding (MOU) with the
National Labor Relations Board (NLRB) allowing the agencies to
share non-public information with each other to “protect
workers against unfair methods of competition, unfair or deceptive
acts or practices, and unfair labor practices.” The FTC’s
press release explains that the MOU was
intended to facilitate cooperation on “key issues such as
labor market concentration, one-sided contract terms and labor
developments in the ‘gig economy.'”

The MOU’s list of “areas of mutual interest”
between the two agencies provides a rough roadmap of the
agency’s top issues in this space:

  • 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

  • The classification and treatment of workers

The FTC has recently focused policy and enforcement resources on
labor issues. Last year, the FTC held a joint event with the Department of
Justice
on “promoting competition in labor markets,”
addressing the labor implications of mergers, contractual
restraints that may impede mobility, information sharing among
employers, and collective bargaining in the gig economy. The FTC
also has taken steps to increase its ability to obtain money relief
in connection with deceptive earnings claims, first by issuing a “Notice of Penalty Offense” concerning
earnings claims
(a new approach that the agency has not yet
used in an enforcement action) and then beginning a rulemaking to prohibit deceptive
earnings claims (which we explained in a prior Legal Update). Its
enforcement has echoed these policy actions, with the agency
imposing restrictions on worker noncompete agreements in merger
cases and suing well-known gig-economy companies in connection with
allegedly deceptive earnings claims (outlined in the MOU press release).

The MOU itself is similar to the FTC’s other inter-agency agreements. Reading much
like a litigation protective order, the document explains how each
agency will handle non-public information obtained from the other
and imposes mutual obligations to keep data secure, among other
things.

What does this mean? The MOU is a procedural
tool and does not itself reflect a shift in the FTC’s policies
or enforcement priorities. But companies should take note of the
MOU’s “areas of mutual interest,” particularly
companies in the gig economy or those contemplating a transaction
that would trigger FTC review. The FTC appears to have these labor
issues front-of-mind, which means company counsel should consider
if they should as well.

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