In the closing days of the Biden administration, antitrust law enforcers issued cautions to employers about conduct that could draw criminal charges against them. One is the use of restrictive non-disclosure agreements that would silence employees who wish to blow the whistle on corporate crimes; the other is the use of no-poach and non-compete agreements to limit worker mobility and economic freedom.
Time will tell whether enforcers in the Trump administration will feel as passionately about these pro-worker positions and antitrust enforcement in general, especially when it comes to Big Tech which Trump 1.0 antitrust enforcers did pursue. He and his selection of Trump 2.0 team members suggest the industry will remain in the spotlight, though predictability will remain a challenge. Trump himself has made comments for and against these companies.
The concerns of some of his voters, people who work at companies, may be out of tune with others, the business owners who employ them. Employment opportunities, wages, and the cost of living, like grocery and gas prices, were central to candidate Trump’s populist message. Traditional Republicans historically are pro-business, but Trump also favors businesses that support him, as his reversal on the TikTok ban arguably illustrates.
President Biden used his farewell speech to address the dangers of a rising oligarchy and, indeed, heads of the world’s largest companies, themselves some of the richest and most powerful in the world, appeared prominently at President Trump’s inauguration. Most protuberant at the proceedings and rallies was Forbes’ richest man in the world and an influential member of the president’s team – Elon Musk.
Musk’s position on restricting workers and the power of enforcement agencies may be gleaned from his defense of a suit brought by the National Relations Labor Board against SpaceX.
In March 2024, the NLRB accused the aerospace company of entering into severance agreements with terminated employees that contained unlawful confidentiality and non-disparagement clauses. Employees were bound not to “disparage the Company, its officer, directors, employees, shareholders, and agents in any manner likely to be harmful to its or their business, business reputation, or personal reputation.”
Musk argued that the complaint was unconstitutional, saying the NLRB lacked authority to bring the case because its administrative judges and five presidentially appointed members were improperly safeguarded from removal.
A federal judge in Waco, Texas, ruled for SpaceX in July 2024, saying the rocket company demonstrated a substantial likelihood of success on its claims that the NLRB members and administrative law judges are unconstitutionally protected from removal (Space Exploration Technologies Corp. v. National Labor Relations Board, et al., No. 6:24-cv-00203, W.D. Texas).
“The Court does not dispute that there is a strong public interest in providing employees a mechanism to vindicate their NLRA rights,” the court wrote. “Nor does this Court find that employers and labor unions should be free from scrutiny of their labor practices. That said, Congress exceeds its power when it attempts to neuter the President’s constitutional power to remove and control executive officers by conferring a web of removal protections upon NLRB ALJs and the NLRB Members. Nothing in the injunction granted here prevents Congress from using a constitutional means to achieve its goals.”
The Fifth Circuit heard arguments on Nov. 18, 2024, the same day it heard a similar case against Amazon. But, according to Bloomberg Law, the constitutionality question took a backseat to one about the efficiency of the lower courts and its impact on the companies. The judges, Bloomberg Law wrote, “grilled lawyers for Amazon and SpaceX over their assertions that district judges effectively denied their preliminary injunction requests by not meeting the companies’ deadlines to freeze administrative proceedings at the NLRB.” The article predicted that a ruling sending the cases back to district court would likely avoid reaching the constitutional issues (Amazon.com v. NLRB, 5th Cir., No. 24-50761 and Space Exploration Technologies Corp. v. NLRB, 5th Cir., No. 24-40315).
Also before the Fifth Circuit is a challenge to the FTC’s ban – following an executive order from President Biden – on non-compete agreements, which is frozen pending appeal. Some observers speculate that the ban will merely dissipate under new leadership at the FTC.
That would be putting it mildly if the Trump administration follows the tone and recommendations of Project 2025. In Chapter 30 on the FTC, Michigan State law professor Adam Candeub, questioned whether the Commission should enforce antitrust laws or whether it should “even continue to exist.” Enforcement should fall solely to the Antitrust Division, and not an independent agency whose members do not serve at the discretion of the president, he wrote.
Candeub, who served in Trump 1.0, concluded with this: “The administrative state will grow and further its own agenda, often at odds with conservative thought, even under conservative leadership. Unless conservatives take a firm hand to the bureaucracy and marshal its power to defend a freedom-promoting agenda, nothing will stop the bureaucracy’s anti–free market, leftist march.”
While that’s a hardline view, some of Trump’s antitrust and antitrust adjacent appointments suggest a balance of viewpoints. Gail Slater and Mark Meador are considered to be sound picks by observers.
Gail Slater, Trump’s pick to head the Antitrust Division, has been generally well received by members of antitrust legal community. An experienced antitrust attorney with a history of government service, Slater has spent time at the FTC and the National Economic Council. Under her leadership, the Antitrust Division is expected to maintain an aggressive enforcement agenda, particularly when it comes to Big Tech and agriculture sectors. In announcing her selection, President Trump wrote that “Big Tech has run wild for years, stifling competition in our most innovative sector and, as we all know, using its market power to crack down on the rights of so many Americans, as well as those of Little Tech!”
Mark Meador was appointed to the fifth seat on the FTC, creating a Republican majority. Meador has expressed support for underused and unorthodox enforcement tactics, such as reviving the Robinson-Patman Act to target discriminatory pricing. He is a veteran antitrust attorney with experience in private practice, the FTC, the DOJ’s Antitrust Division, and was an advisor to Senator Mike Lee (R-UT) on antitrust matters. He will be on board to pursue aggressive antitrust enforcement against Big Tech. He criticizes the practices of major technology companies and even drafted legislation to break up Google’s digital advertising business.
Andrew Ferguson, on the other hand, President Trump’s pick to succeed Lina Khan as FTC Chair, will likely please more right-leaning observers. Ferguson frequently dissented from FTC enforcement actions as a commissioner during the Biden administration. He strongly opposed the ban on non-compete agreements. His record suggests a higher threshold for challenging deals and litigating against allegedly anticompetitive conduct. In a recent dissent, Ferguson wrote: “The Democratic majority’s four-year regulatory assault on American businesses has hindered economic growth and increased costs to the American consumer. The American people resoundingly rejected this approach at the ballot box in November.”
Skepticism – or outright hostility – toward government enforcers who are out of reach of the president famously reached the nation’s highest court last year, and it is already playing a role in cases challenging the FTC’s non-compete ban. The Supreme Court’s Loper Bright decision, which overturned the longstanding Chevron deference doctrine and significantly expanded the judiciary's power to independently review and reject agency interpretations of laws (Loper Bright Enterprises v. Raimondo, 603 U.S. 369, [2024]) is being used as a tool to challenge agency actions. A federal judge in Florida cited Loper in ruling against the ban (Properties of the Villages, Inc. v. FTC, No. 24-cv-316, M.D. Fla.), a decision now before the Eleventh Circuit.
Meanwhile, four states – California, North Dakota, Oklahoma, and Minnesota – have banned non-compete agreements, and 33 states plus Washington, D.C. have implemented various restrictions on their use.
SpaceX isn’t the only Musk business to draw government attention over worker agreements. Tesla made the list, too. So have Amazon, Apple, and Meta. Microsoft got ahead of the issue and voluntarily addressed non-compete policies.
Putting his NDAs to work in 2023, Musk claimed that Meta's new platform, Threads, was developed using trade secrets from former Twitter employees who had signed the agreements. In the same year Tesla sued former employees who joined rival electric car company Rivian Automotive, Inc., alleging they breached NDAs by sharing trade secrets.
The challenges illustrate the growing tension between protecting corporate interests and safeguarding employees' rights, and between confidentiality and transparency. Again, the question is whether regulatory bodies in the Trump administration will continue to pay close attention to agreements restricting workers.
Perhaps as coda to the Biden administration’s efforts on behalf of workers – and expressing hope that they will continue – the Justice Department’s Antitrust Division and the Department of Labor’s Occupational Safety and Health Administration (OSHA) jointly affirmed on Jan. 14 that NDAs that deter individuals from reporting antitrust crimes undermine the goals of whistleblower protection laws, including the Criminal Antitrust Anti-Retaliation Act of 2019 (CAARA). CAARA prohibits employers from retaliating against workers who report potential criminal antitrust violations or assist in federal investigations.
The agencies noted that the law is crucial for encouraging reporting of antitrust crimes, and NDAs can be troublesome for employers in three key ways. First, the Antitrust Division considers the use of NDAs when making charging decisions and sentencing recommendations. Second, use of NDAs to obstruct investigations may lead to additional federal criminal charges. Third, companies that interfere with employee cooperation risk losing leniency benefits under the Antitrust Division’s policies.
Businesses have valid reasons to insist on NDAs to protect trade secrets, strategic plans, and confidential business transaction information. But the outgoing administration wanted companies to know there is a line employers will not want to cross.
The outgoing enforcers did not just issue statements. On Jan. 17, the FTC approved a final order requiring a building service contractor to stop enforcing a no-hire agreement. Guardian Service Industries, Inc. had been prohibiting its building owner clients and competing building service contractors from hiring Guardian’s employees, concierge personnel, custodians, and maintenance technicians. These are not highly compensated positions. The agreements limited workers’ ability negotiate higher wages, better benefits, and improved working conditions, the FTC alleged.
Going forward, it will be important to watch -- when the choice is between government regulation and absolute trust in free markets -- which the Trump administration will pick.
Whatever the case, it’s a good time for companies to ensure their NDAs do not deter employees from reporting potential antitrust violations, that they incorporate anti-retaliation policies and CAARA training into compliance programs, and encourage employees to report misconduct without fear of retaliation.
In addition to re-declaring the illegality of forcing workers into restrictive agreements, the Biden antitrust teams also dropped during the administration’s twilight hours new guidelines for companies. The Antitrust Division and the FTC released revised Antitrust Guidelines for Business Practices Affecting Workers, replacing those crafted in 2016. These guidelines cover some of the same territory as the DOJ and DOL warnings, but address other subjects. Here is what they had to say on:
The antitrust laws, including the Sherman Act, Clayton Act, and Federal Trade Commission Act, are designed to protect competition for labor. These laws ensure that workers have the freedom to choose the best job opportunities, leading to better wages, benefits, and working conditions. Just as competition for goods and services benefits consumers, competition among employers benefits workers.
Certain agreements between companies can violate antitrust laws and lead to criminal charges. This includes wage-fixing and no-poach agreements. Wage-fixing agreements involve setting workers' salaries or other terms of compensation, while no-poach agreements involve not hiring or soliciting each other's employees. These agreements are illegal regardless of their form or whether they result in actual harm.
No-poach clauses in franchise agreements are under strict antitrust scrutiny. Agreements between franchisors and franchisees, or among franchisees, not to compete for workers can be per se illegal under antitrust laws. This means the agreement itself is illegal, regardless of whether it actually harms workers. Professionals in the franchise industry should be particularly cautious about these clauses.
Non-compete clauses that restrict workers from switching jobs or starting a competing business can violate antitrust laws. These clauses decrease competition for workers and may prevent other businesses from entering the market or competing effectively. The DOJ and FTC may investigate and take action against non-competes and other restraints on worker mobility that limit competition.
The DOJ and FTC encourage reporting potential antitrust violations. Professionals who notice suspicious activities or believe there has been an antitrust violation should report it to either or both agencies. Complaints can be submitted online, by phone, or by mail, and should include details about the companies or individuals involved, the nature of the violation, examples of the conduct, and how competition may have been harmed.
The transition from the Biden to the Trump administration brings uncertainty regarding the enforcement of antitrust laws, particularly those affecting worker agreements like NDAs and non-competes. While the Biden administration emphasized protecting worker mobility and whistleblower rights, the Trump administration's approach remains to be seen. With key appointments suggesting a mix of aggressive enforcement and pro-business stances, companies must stay vigilant.