FTC and NLRB Announce Interagency Cooperation in the “Gig Economy” | Smaller

On July 19, 2022, the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) signed a four-page agreement Memorandum of Understanding (MOU) regarding information sharing, inter-agency training and outreach in areas of common regulatory interest, focusing on the “gig economy”. The agencies identified the following areas of interest:

Regulatory issues of common interest include labor market developments related to the “gig economy” and other alternative work arrangements; claims and disclosures about revenues and costs associated with concerts and other works; the imposition of unilateral and restrictive contractual provisions, such as non-competition and non-disclosure clauses; the extent and impact of labor market concentration; the impact of algorithmic decision making on workers; the ability of workers to act collectively; and the classification and treatment of workers.1

Although the MOU identifies information sharing, training, and awareness as its three purposes, the document primarily addresses the sharing of “non-public information” between the FTC and NLRB in pursuit of their common goals. declared.

The MOU defines “non-public information” as “all information in any form (including written, oral, or electronic) shared pursuant to this MOU, unless the provider party [the agency providing the information] expressly consents to or designates the information as publicly available. »2 The MOU does not expressly state whether the non-public information is information collected by either agency as part of its targeted surveys. However, existing FTC rules allow information collected from individuals who submit it in investigations to be shared with federal and state agencies for law enforcement and non-criminal purposes. application of law, without notice or consent from the person submitting it.3 This memorandum of understanding appears to streamline the inter-agency process for sharing this information.

Companies or individuals who may have submitted information to an agency are limited, under this MoU, to obtaining information about whether their nonpublic information has been shared with the other. The MOU “does not grant any third party any rights and in particular does not grant any third party the ability, directly or indirectly, to obtain, remove or exclude any information shared under this MOU, or to dispute a claim under this Memorandum of Understanding.”4 And the agency receiving information under the MOU (the “receiving party”) may not disclose that fact to any third party without the consent of the providing party.5 The Receiving Party must refer any request under the Freedom of Information Act regarding the non-public information in question to the Providing Party for response.6 If a request for disclosure of non-public information is made in connection with legal proceedings (for examplesubpoenas or court orders), the Receiving Party will consent to the request of the Supplying Party to intervene in the legal proceeding in question.seven

The memorandum of understanding is the federal government’s latest effort to expand labor market antitrust enforcement from its traditional concern with consumer prices. On April 13, 2020, the FTC and the United States Department of Justice (DOJ) issued joint guidelines on the investigation and prosecution of wage-fixing and other anti-competitive agreements between employers, placement agencies and recruiters as a result of the COVID-19 pandemic. A Executive decree of July 9, 2021 on Promoting Competition in the U.S. Economy took an even broader slant to address market consolidation that “makes it harder for workers to negotiate higher wages and better working conditions.”8 This executive order explicitly mentioned cooperation between the FTC and the DOJ.9 He also created a White House Competition Council made up of nine agency heads; the NLRB was not one of them.ten The executive order adopts what it calls a “whole of government approach.” . . to fight overconcentration, monopolization and unfair competition in the US economy. These efforts have included the FTC’s ban on non-competition enforcement as a condition of approving mergers and acquisitions, and criminal prosecution by the DOJ for alleged wage-fixing conspiracies. The new memorandum of understanding and its explicit mission statement bring the NLRB into the fold of the Biden administration’s concerted focus on antitrust enforcement in labor markets.

The MOU also comes at a time when current NLRB members have guest amicus briefs on the continued viability of SuperShuttle DFW, Inc.367 NLRB No. 75 (January 25, 2019), which reinstated the focus on “entrepreneurial opportunity” in the common law agency test for determining whether a worker is properly classified as an employee or independent contractor. Supershuttle overturned the NLRB’s decision in FedEx home delivery361 NLRB No. 610 (2014), child refuse, 849 F.3d 1123 (DC Cir. 2017), which purported to examine the actual, rather than theoretical, entrepreneurial opportunities available to workers classified as independent contractors. The practical effect of returning to FedEx home delivery norm would be to limit the ability of companies to structure their working relationships with independent service providers. For a more in-depth look at these NLRB decisions, see Littler’s previous coverage on this topic.

Taken in the context of these developments, the MOU suggests that gig economy companies reviewed by either agency should expect that information submitted to an agency may be reviewed by both. Particular attention should be paid to service agreements that could be interpreted as restricting the freedom of independent contractors to contract with competing platforms. Companies should keep in mind that non-competition clauses in these agreements may be interpreted as evidence that an individual is an employee rather than an independent contractor, particularly if the service provided does not involve the access to confidential company information. Businesses should work with competent attorneys to ensure that all non-solicitation of customers provisions are appropriate to protect customer privacy and security, legitimate property rights, and inappropriate use of Company platforms. .

Other areas of interest identified by the MOU raise new enforcement issues as applied to independent contractors, including: “claims and disclosures regarding income and costs associated with concerts and other work; ” “the impact of algorithmic decision-making on workers;” and the “capacity of workers to act collectively”. Close future cooperation between the FTC and the NLRB raises the possibility that an agency finding of an employment relationship could be made in conjunction with an agency finding that gig economy companies violate workers’ rights in these areas. . Businesses are advised to consult with an experienced attorney to determine options for protecting legitimate business needs while preserving the independent nature of individual service providers with respect to each of these areas of interest.

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