One year after the first criminal indictment for wage-fixing, a Texas federal district court has ruled that an agreement to fix wages is a per se violation of Section 1 of the Sherman Act.
While over the last century the Supreme Court and lower federal courts have developed a robust body of case law interpreting the Sherman Act’s somewhat enigmatic prohibition on “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States,” wage-fixing and so-called “no-poach” agreements have received little attention. The spotlight on wage-fixing has shifted slowly—beginning in 2016 with the joint Department of Justice (DOJ) and Federal Trade Commission (FTC) warning (and related HR guidance) that no-poach and wage-fixing agreements would be prosecuted criminally, a flurry of recent civil litigation, the first criminal indictments, and the Biden administration’s July 2021 executive order pledging to target antitrust enforcement efforts on labor markets.
The court’s opinion denying defendants’ motion to dismiss in United States v. Jindal—the Justice Department’s first-ever Sherman Act wage-fixing prosecution (discussed here)—opens up a new frontier for federal antitrust enforcement, which has traditionally focused more on sellers of goods and services than on buyers of labor.