The Department of Justice’s top antitrust official announced that criminal charges against companies who agreed not to hire one another’s employees will be forthcoming, with announcements to be made in the coming months.
This past week the FTC and DOJ issued an 11-page guidance document aimed at protecting employees against anticompetitive conduct with respect to naked wage-fixing and agreements, in which companies agree on salary or other terms of compensation, and anti-poaching agreements. The guidance to human resource (“HR”) professionals and hiring managers relates to both hiring and compensation decisions.
The government’s guidance makes clear that naked wage-fixing agreements and anti-poaching agreements, in which companies agree not to recruit each other’s employees, are illegal under U.S. antitrust laws and, moving forward, DOJ will criminally investigate both individuals and companies suspected of their violation. There is a carve-out for legitimate collaboration between employers. The most common form of relevant, legitimate collaboration would be a joint venture between two companies, as these are not considered per se illegal under the antitrust laws.
Continue Reading FTC, DOJ Issue Guidance for HR Professionals on the Application of Antitrust Law to Hiring and Compensation
In response to a presidential memorandum directing the Department of Labor (“DOL”) to collect summary compensation data from federal contractors and subcontractors to combat pay discrimination, the DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) recently proposed a rule calling on certain federal contractors to submit reports on employee compensation. The rule, published in the Federal Register on August 8, requires covered contractors to annually submit an “Equal Pay Report.” Covered federal contractors and subcontractors are those who:
- File EEO-1 reports;
- Have more than 100 employees; and
- Hold federal contracts or subcontracts worth $50,000 or more for at least 30 days.
On April 8, 2014, in recognition of National Equal Pay Day, President Obama continued to advance his wage equality agenda by focusing on wage transparency through Executive Order on Non-Retaliation for Disclosure of Compensation Information (“Executive Order”) and a Presidential Memorandum entitled “Advancing Pay Equality Through Compensation Data Collection” (“Presidential Memorandum”).
President Obama is not only focused on health care these days. He is also focused on helping companies keep employees, rather than lay them off, during a tough economic time. The federal government will actually supplement wages, in certain circumstances, to stop layoffs. In February of 2012, President Barack Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012. The chief focus of the Act was extending tax cuts for the middle class. However, the Act also made substantial revisions to the unemployment insurance system. One of the key revisions was to provide substantial federal funding for the expansion of state short-time compensation (“STC”) programs, which are sometimes referred to as “work sharing” programs.
Effective February 28, 2013, the Office of Federal Contract Compliance Programs (“OFCCP” or “Office”) has rescinded two guidance documents implemented during the Bush administration that outlined methods for investigating and evaluating pay discrimination claims against federal contractors and replaced them with new guidelines emphasizing a case-by-case approach that provides investigators with authority to conduct more thorough investigations and identify a broader range of compensation-related discrimination. The first document, Interpreting Nondiscrimination Requirements of Executive Order 11246 With Respect to Systemic Compensation Discrimination (“Compensation Standards”), set forth the procedures OFCCP followed when issuing a notice of violation for pay discrimination; and the second document, Voluntary Guidelines for Self-Evaluation of Compensation Practices for Compliance with Nondiscrimination Requirements of Executive Order 11246 (“Voluntary Guidelines”), contained directions that federal contractors themselves could follow to preemptively show compliance with their obligation to evaluate their internal pay practices for fairness.
Federal contractors have numerous non-discrimination and affirmative action obligations under Executive Order 11246, the Vietnam Era Veterans’ Readjustment Assistance Act ("VEVRAA") and the Rehabilitation Act, including the preparation of annual written affirmative action plans. These obligations are enforced by the Department of Labor’s Office of Federal Contract Compliance Programs ("OFCCP"), which is currently headed by Patricia A. Shiu. Since Shiu was appointed director in August of 2009, the OFCCP has been extremely active, increasing contractors’ affirmative action requirements and expanding the OFCCP’s role in enforcing these requirements. The OFCCP’s recent efforts are notable because they will likely increase contractors’ data collection and reporting requirements. Several of these actions are described below.