Last week, the Federal Trade Commission (FTC) and the Department of Labor (DOL) partnered to protect workers against anticompetitive, deceptive, and unfair employment practices. The agencies’ memorandum of understanding (MOU) outlines ways in which the FTC and DOL can jointly tackle issues like labor market concentration, one-sided contract terms, and developing labor rights issues within the gig economy. The MOU continues previous interagency enforcement efforts between the FTC and various other federal employment law agencies. In May 2023, the FTC and other agencies released joint statements on using artificial intelligence and other automated tools for employment decisions.
Background of the FTC and DOL Partnership
The agency partnership follows last year’s MOU between the FTC and the National Labor Relations Board (NLRB). The previous partnership focused on restrictive contract provisions. Additionally, the MOU builds on the FTC’s enforcement policy statement on protecting gig workers. In announcing the most recent partnership, FTC Chair Lina M. Khan stated that “Deepening our partnership with DOL will ensure that we can work collectively to tackle illegal conduct that suppresses wages, reduces access to good benefits and working conditions, and stifles economic liberty for workers across the economy.”
Joint Efforts to Prevent Unfair Employment Practices
In brief, each partnership seeks to enhance information-sharing, investigation, enforcement, cross-training, and outreach to combat unfair employment practices. The agencies’ MOU identifies several key areas of mutual interest between the agencies. Joint efforts between the FTC and DOL will focus on addressing the following anticompetitive, deceptive, and unfair employment practices:
- Collusion between businesses;
- Employee misclassification;
- Illegal claims about earnings and work costs;
- Unfair and restrictive contract provisions like non-competes and training repayment agreements;
- Unhealthy labor market concentration; and
- Artificial intelligence tools and algorithmic decision-making in employment.
Finally, the FTC will continue efforts to prevent deceptive and unfair employment practices aimed at underserved workers in the gig economy.
History of the DOL and FTC
Created in 1913, the DOL is responsible for promoting and protecting workers’ rights, improving working conditions, and advancing employment opportunities. It oversees various agencies, including the Occupational Safety and Health Administration (OSHA) and the Wage and Hour Division (WHD), which enforces the Fair Labor Standards Act (FLSA), the nation’s primary wage law and one of the main employment laws employers should know. The DOL administers and enforces more than 180 federal laws. These mandates and regulations cover many workplace activities for about 150 million workers and 10 million workplaces.
Meanwhile, the FTC was created in 1914 along with the Federal Trade Commission Act. The goal of the FTC is to protect consumers and promote fair competition in the market. In brief, the FTC works to prevent fraud, deception, and unfair business practices. Its focus includes federal anti-trust laws and anticompetitive mergers.