Overview
On September 27, the US Federal Trade Commission (FTC) announced that it was withdrawing from a Memorandum of Understanding on Labor Issues in Merger Investigations (MOU) with the Department of Justice Antitrust Division (DOJ), the National Labor Relations Board (NLRB), and the Department of Labor (DOL). The FTC withdrew from the MOU without explanation only a month after the agencies executed it. The MOU, which is still in effect for the other three agencies, provided for an information-sharing protocol, a training program whereby DOL and NLRB would train DOJ-Antitrust and FTC personnel on labor-related issues, and biennial coordination meetings. The MOU did not replace previous bilateral agreements between the agencies on information-sharing; those agreements remain in effect.
Aside from its timing, the FTC's withdrawal from the MOU is also surprising because the terms of the MOU are fairly modest. The information-sharing protocols relate primarily to information that is already publicly available, and the training requirements impose no requirements on FTC and DOJ. Instead, the MOU contemplates that DOL will train DOJ and FTC on issues "related to their jurisdiction," and that NLRB will train DOJ and FTC "on the duty to bargain in good faith, successor bargaining obligations, and unfair labor practices, among other topics" — this hardly seems controversial.
In its statement announcing the withdrawal, the FTC stated that it would "continue to closely scrutinize all issues related to mergers, including potential impacts on labor, in accordance with its merger guidelines." The FTC, under the leadership of FTC Chair Lina Khan, has taken an aggressive stand on protecting competition in the labor market. For example, in December 2023, the FTC and DOJ revised their merger guidelines to specifically account for a proposed merger's effect on competition in the labor market. Under those guidelines, the FTC and DOJ "will consider whether workers face a risk that the merger may substantially lessen competition for their labor."
In February, the FTC challenged the merger of grocery stores Kroger and Albertsons and cited, not only the proposed merger’s allegedly negative effects on consumers, but also its alleged negative effects on the labor market. According to the FTC in its press release announcing its challenge to the merger, "a combined Kroger/Albertsons, . . . would gain increased leverage over workers and their unions." Irrespective of the FTC’s participation in the MOU, it is clear that, at least under its current leadership, the FTC will continue to closely scrutinize proposed mergers’ potential effects on the labor market.
