Published on Dec 05, 2024
FTC orders building services contractor to cease no-hire agreement, saying Sherman Act and FTC Act violations caused harm to workers. The Federal Trade Commission reached a settlement with Guardian Service Industries Inc., a building services contractor with over 2800 employees, to stop enforcing a policy that prohibited building owners and managers from hiring Guardian workers.
According to a complaint filed Wednesday with the FTC’s in-house court, Guardian’s contracts with buildings sometimes included no-hire agreements. They typically prevented the buildings where Guardian workers were staffed from hiring the employees directly—even when Guardian’s contract was up—and blocked successor contractors from doing the same. As a result, employees including front desk personnel, custodians, and maintenance workers had a harder time negotiating for higher pay, greater benefits, and better working conditions, the FTC alleged.
By restraining employees’ freedom to move between competitors, those agreements violate Section 1 of the Sherman Act, and therefore are also unfair methods of competition in violation of Section 5 of the FTC Act, the agency said.
“Guardian’s use of No-Hire Agreements is a method of competition that is unfair and has the tendency or likely effect of harming competition, consumers, or workers, including by: (i) impeding the entry and expansion of Guardian’s competitors in the building services industry, (ii) reducing employee mobility, and (iii) causing lower wages and salaries, reduced benefits, less favorable working conditions, and, among other things, personal hardship to employees,” the FTC alleged in the complaint.
The FTC made similar arguments in its ongoing battle to ban noncompete agreements nationwide.
Under the proposed consent order, Guardian must drop enforcement and use of its no-hire provisions. It also must inform employees and customers of the settlement and nullify any existing restrictions, the FTC said.
“Guardian, operating as a middleman, has restricted building owners and competitors from hiring workers while also forcing mostly low wage employees to accept unfair employment terms that restrain job mobility, wage growth, and their economic freedom,” Bureau of Competition Director Henry Liu said in a statement. “Today’s action restores competition by creating a level playing field for employers in the building services industry. The FTC will continue to investigate business practices that restrict accessible opportunities for workers.”
Guardian didn’t reply to a request for comment.
The vote to issue the order and accept the settlement was 3-2, with Republican-appointed commissioners Andrew Ferguson and Melissa Holyoak dissenting. They criticized the Democrat-appointed majority for filing the complaint, arguing that the agency lacked sufficient evidence to show the agreements were strictly anticompetitive, rather than having procompetitive justifications.
Guardian isn’t the only building services contractor to fall under FTC scrutiny for limiting workers’ ability to switch jobs. Planned Companies, also based in New York and New Jersey and operating under a similar business model, is under investigation by the commission for illegal no-hire agreements, The Capitol Forum previously reported.
The union representing workers at Planned—Service Employees International Union 32BJ—accused the company of restricting customer buildings from hiring its workers for six months after either the termination of Planned’s contract or after the employees left the company.
Class action suit vs. supermarket giants. Kroger (KR) and Albertsons (ACI) illegally colluded to depress the wages and benefits of striking employees, according to a proposed class action filed last week in Colorado state court by a Kroger worker.
Albertsons undermined the leverage of striking Kroger employees by reaching an agreement with its competitor not to hire the workers during a 2022 work stoppage, said Valarie Morgan, a worker at a Kroger-owned King Sooper and a member of United Food and Commercial Workers (UFCW) Local 7, in a lawsuit filed Nov. 25 in state court.
While employers normally face enhanced pressure to come to the bargaining table during strikes due to the risk their competitors may hire the strikers, the no-poach agreement successfully counteracted Local 7’s leverage, the lawsuit alleged. That means Kroger workers represented by Local 7 are making less money than they would have absent the agreement, Morgan said in the complaint.
Because the Kroger contract with Local 7 enacted the lower wage rates, later contract negotiations between the union and Albertsons started off at a lower pay threshold, boosting the company’s position with its own employees, Morgan alleged. The company agreed to the same wage increases and major contract terms as Kroger.
Workers at other Colorado Kroger and Albertsons stores represented by the union, including Safeway, were all affected, she said.
“We don’t intend to hire any King Soupers [sic] employees and we have already advised the Safeway division of our position and the division agrees,” an Albertsons vice president wrote to his counterpart at Kroger, according to the complaint. The email was shared with other Albertsons executives, at least one of whom said the company had agreed not to hire King Soopers workers, the lawsuit alleged.
It’s not the first time the two grocery giants—currently battling the FTC and a coalition of states in an effort to complete their $24.6 billion merger—have been accused of forging an illegal no-poach agreement during the 2022 work stoppage. Colorado Attorney General Phil Weiser sued to block the deal in February, challenging the alleged no-poach agreement and seeking a $1 million penalty from each company in addition to an order preventing them from entering into similarly restrictive agreements in the future. The trial in that lawsuit wrapped up in October.
The FTC’s case similarly highlights the importance of the collective bargaining interplay between Kroger, Albertsons, and employee unions. A merger between the grocery giants would degrade wages and working conditions as a result of the union losing its ability to play the companies against each other during collective bargaining, the agency’s lawsuit alleges.
“There were no non-solicitation or so-called no-poach agreements between Kroger and Albertsons,” a Kroger spokesperson said in an emailed statement. “Kroger competes for talent in a broad and diverse labor market, including from non-grocery, non-union retailers like restaurants, food service companies, conveniences, warehouses and more. In fact, data shows that only 1-2.5% of Kroger associates come from and/or move to Albertsons.”
An Albertsons spokesperson declined to comment.
Lawsuit alleges Apple violates privacy laws in monitoring employees’ devices, echoing Commissioner Bedoya’s remarks on reining in workplace surveillance technology. Apple’s employee surveillance practices illegally infringe on privacy rights, according to a lawsuit filed against the tech giant last week in the Santa Clara County Superior Court in California. The action echoes concerns highlighted in a recent speech by FTC Commissioner Alvaro Bedoya in which he stressed the need to rein in technologies that monitor employees’ job performance and personal information.
The suit, filed by former employee Amar Bhakta, targets Apple’s (AAPL) practice of accessing data on employee’s personal devices: Apple computers and smartphones running company-owned software which Apple allegedly encourages workers to use on the job. Bakhta claims that Apple pushes employees to use their personal devices and iCloud accounts for work tasks and asserts the right to collect data and search devices while employees are on company premises, which may extend to home offices.
Employers across industries have in recent years ramped up their usage of similar tech to monitor and collect data from employees. Amazon’s (AMZN) increased reliance on automated management of warehouse workers, the implementation of AI-operated performance evaluations at call centers, and the emergence of workplace productivity monitors like keystroke tracking have encroached on workers’ privacy on and off the job—to an extent that some regulators see as potential law violations.
In a speech at the NYU Wagner Labor Initiative last month, Bedoya made the case that the usage of invasive workplace surveillance technology can constitute an unfair trade practice under the FTC Act. He argued for enforcement by the agency, protections through worker collective bargaining, and legislative action to quell practices like those alleged in the suit against Apple, along with a host of other intrusions on workers’ privacy rights.
“How can I be that when I sit at home and buy something with my credit card, turn on cable, or watch a show online, privacy laws may govern that data; but when I go to work, seemingly anything goes?” Bedoya said in his remarks.
The lawsuit against Apple also charges the company with violating its workers’ rights to speak freely about their jobs. Suppressing discussion of compensation and working conditions violates California labor laws, the lawsuit argues. Confidentiality restrictions on discussing activities, even after working at Apple, illegally limits employees’ ability to seek opportunities at other companies, it alleges.
Amazon Flex drivers win preliminary collective action ruling over overtime and wage claims. A group of drivers for Amazon Flex—the online retail giant’s gig-based delivery arm—who sued the company in 2016 alleging they were misclassified as independent contractors and are owed wages and expenses, convinced a federal judge to allow them to begin contacting class members.
Judge John Coughenour of the Western District of Washington district court on Monday granted the plaintiffs’ motion for conditional certification of a collective action, the first of two steps to acquire class status under the Fair Labor Standards Act. Once discovery is complete, the court will take a second look at the collective and verify whether they’re similarly situated—a requirement for class status.
Amazon plans to appeal the ruling, a spokesperson said in an emailed statement.
“Amazon Flex provides opportunities for people to supplement their income by using their own vehicle to deliver packages, and they have the freedom to make their own schedules and deliver for other companies if they so choose,” they said. “We look forward to making this clear through the process.”
Under Coughenour’s order, the plaintiffs can now contact all potential members of the collective: everyone who worked as an Amazon Flex driver since Oct. 27, 2013. He ordered Amazon to provide the plaintiff drivers with collective members’ names, work locations, mailing and email addresses, and dates of employment.
A group of Flex drivers initially sued Amazon in 2016, accusing the company of misclassifying them as independent contractors, a move that denied them minimum wage and overtime pay. The lawsuit spent years on ice as the parties awaited rulings from other courts on whether the claims could be knocked into arbitration.
The plaintiffs’ claims have been updated several times. Besides the federal allegations, they also accuse Amazon of violating various California, Illinois, New York, New Jersey, and Washington state laws on pay, sick leave, and breaks. Its actions gave the online retail behemoth an unfair competitive advantage over rivals, the drivers alleged.
The Flex drivers’ lawsuit is part of a broader effort by workers to hold Amazon accountable for alleged misclassification and ill treatment. The International Brotherhood of Teamsters has prioritized organizing drivers employed by third-party contractors for the Seattle-based e-commerce giant, and recently won a pair of preliminary victories at the National Labor Relations Board allowing the union to bargain with both the drivers’ immediate employer and Amazon as a joint employer.
Aveanna Healthcare faces California labor suit. Nurses at Aveanna Healthcare, a private equity-backed home healthcare company, filed a class action lawsuit in California state court Tuesday against their employer alleging a host of labor code violations. They accused Aveanna of wage theft, insufficient meal and rest breaks, forced overtime, and requiring them to pay out of pocket for expenses like masks, stethoscopes, and thermometers.
Aveanna was formed from the consolidation of Epic Health Services and PSA Healthcare and a series of acquisitions of smaller providers, for which it accrued $1.75 billion in total liabilities. The company’s practices reflect the type of significant cost-cutting efforts that are typical for a large debt service obligation. A 2019 Bloomberg investigation uncovered Aveanna denying patients care from nurses when facing overtime hours and the deaths of seven children under the company’s care. The Indiana State Department of Health found extensive quality and safety violations in one Aveanna facility, leading to the termination of its Medicare contract.
The Capitol Forum reported in October that state regulators had begun to raise red flags about the company’s ability to provide sufficient services for high-need patients. Even when patients do receive care, it’s often far less extensive than what doctors ordered.
