Gig Economy to Get More Scrutiny Under FTC, Labor Department Pact

The Federal Trade Commission and Department of Labor signed an agreement to collaborate on training, share information, and partner on investigations, particularly in the gig economy.

The memorandum of understanding, announced Thursday, enables the two agencies to more closely work together on competition issues in US labor markets, they said in a statement. Primary areas of focus will be labor market concentration, one-sided contract terms, and the gig economy, they said.

It’s the most recent in a series of similar agreements between the FTC and Justice Department and other parts of the federal government—particularly labor regulators—meant to deepen enforcement after President Joe Biden signed a sweeping executive order in 2021 calling for a “whole of government” approach to competition.

Agency staff may work together on complaints and share information as they pursue enforcement actions, according to Thursday’s statement. That coordination will be especially useful as the FTC cracks down on labor market antitrust abuses—a relatively new frontier that’s quickly taken shape under the Biden administration as the agency seeks to ban noncompete agreements and explores antitrust enforcement in the gig economy.

“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,” FTC Chair Lina Khan said in a statement.

Staff from both agencies will receive training on areas of overlap in their jurisdictions, the MOU said. When either agency detects potential violations of the laws enforced by the other, it can refer that matter for further investigations.

A web of information-sharing agreements has sprung up around the antitrust agencies since the Biden order. In July 2022, the FTC and the National Labor Relations Board agreed to coordinate their enforcement efforts. The Justice Department’s antitrust division signed a similar agreement with the labor board less than two weeks later.

Primary areas of interest to both agencies include collusive behavior and “the use of business models designed to evade legal accountability,” according to the statement. Those areas encompass misclassifying employees as independent contractors, illegal or deceptive claims about earnings and costs, one-sided contracts and restrictive provisions such as noncompetes and nondislosure pacts, labor market concentration, and “algorithmic decision-making,” according to the agreement.

“Protecting workers on the job and promoting fair markets requires a level playing field,” Solicitor of Labor Seema Nanda said in the statement. “What’s unfair for workers is also unfair for law-abiding employers, and this partnership will help both of our agencies combat unlawful behavior, such as misclassification and contract provisions that restrict accessible opportunities to our growing workforce.”