The Federal Trade Commission (FTC) and the Department of Labor (DOL) have entered into a Memorandum of Understanding (MOU) to join forces to combat unfair practices in the labor market. Under the MOU, the agencies will collaborate to share information, coordinate investigations, and cross-train staff.

FTC Chair Lina M. Khan says the partnership will ensure the agencies “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.”

The MOU identifies several areas of mutual interest between the two agencies, including labor market concentration, one-sided contract terms, and labor developments in the “gig economy.”

Specifically, the agencies are jointly interested in the following:

Collusive behavior
Employee misclassification
Illegal claims and disclosures about earnings and costs associated with work
One-sided and restrictive contract provisions, such as non-compete and training repayment agreements
The impact of algorithmic decision-making on workers

The partnership aligns with the “whole of government” agenda President Joe Biden put forward in 2021 in which he called on all federal agencies to cooperate fully to “exercise their oversight authority.” It follows other inter-agency collaborations, including a July 2022 MOU between the FTC and the National Labor Relations Board.

Employers should expect scrutiny

The MOU signals that the FTC and DOL are increasingly focused on protecting workers from anticompetitive and unfair practices. That means that employers should expect more scrutiny of their employment practices, particularly those that could impact wages, hours, and working conditions.

As always, employers should be vigilant in reviewing their employment practices to identify and address any potential risks. That includes reviewing any restrictive covenants, ensuring they’re paying workers fair wages and overtime pay, and training managers and supervisors on the laws that apply to their employment practices.

Be transparent with employees about their employment rights and create a culture of compliance within your organization. Finally, be aware the FTC and DOL are likely to share referrals with each other, so take action right away if either agency contacts your company.