Interagency Merger Review In Labor Markets

Chicago-Kent Law Review Volume 95 Issue 1 The State of the Law of the New Labor Movement Article 38 9-15-2020 Interagency Merger Review In Labor Markets Hiba Hafiz Boston College Law School Follow this and additional works at: https://scholarship.kentlaw.iit.edu/cklawreview Part of the Labor and Employment Law Commons Recommended Citation Hiba Hafiz, Interagency Merger Review In Labor Markets, 95 Chi.-Kent L. Rev. 37 (2020). Available at: https://scholarship.kentlaw.iit.edu/cklawreview/vol95/iss1/38 This Article is brought to you for free and open access by Scholarly Commons @ IIT Chicago-Kent College of Law. It has been accepted for inclusion in Chicago-Kent Law Review by an authorized editor of Scholarly Commons @ IIT Chicago-Kent College of Law. For more information, please contact , . 42394-ckt_95-1 Sheet No. 23 Side A 06/12/2020 13:18:38 3 HAFIZ MACRO 1 EIC 5.4 (DO NOT DELETE) 6/5/2020 11:54 AM INTERAGENCY MERGER REVIEW IN LABOR MARKETS HIBA HAFIZ * Hiba Hafiz is an Assistant Professor of Law at Boston College Law School. 37 06/12/2020 13:18:38 * 42394-ckt_95-1 Sheet No. 23 Side A As empirical evidence of labor market concentration mounts, academics and policymakers advanced proposals to challenge or reverse its effects on workers’ wages and labor market options. Prominent among these is more aggressive review of the labor market effects of mergers by the Department of Justice (DOJ) and the Federal Trade Commission (FTC). This Essay argues for an alternative intervention: because placing exclusive jurisdiction over the labor market effects of mergers in the DOJ and FTC will be fundamentally limited for historical, doctrinal, institutional, and expertise-based reasons and as a matter of prophylactic policy, the National Labor Relations Board (“NLRB”) should have concurrent jurisdiction to review and approve mergers that the DOJ or FTC determine will substantially or moderately increase labor market concentration in a relevant labor market under a “public interest” standard. The Essay first outlines the limitations of existing proposals to regulate labor market effects exclusively through the antitrust agencies’ merger review. Second, it catalogs and evaluates the range of interagency coordination between the antitrust and regulatory agencies on merger reviews, including but not limited to the antitrust agencies’ concurrent jurisdiction with the Federal Communications Commission. This overview documents how, in a significant number of industries outside of labor markets, regulatory agencies review and condition mergers under a “public interest” standard and based on their industry-specific knowledge and expertise. That deeper background of shared interagency jurisdiction contextualizes and supports the proposed extension of concurrent jurisdiction to labor agencies in merger reviews with labor market effects. Finally, the Essay provides recommendations for how the Board’s concurrent jurisdiction could operate to integrate its expertise into the evaluation of post-merger labor market effects. 42394-ckt_95-1 Sheet No. 23 Side B 06/12/2020 13:18:38 3 HAFIZ MACRO 1 EIC 5.4 (DO NOT DELETE) 38 CHICAGO-KENT LAW REVIEW 6/5/2020 11:54 AM [Vol 95:1 INTRODUCTION Evidence of labor market concentration, mergers’ suppressive effects on wages, employer collusion through wage-fixing and no-poaching agreements, rampant use of non-compete agreements, and broader labor market failures resulting in employer buyer power has drawn sharp attention to labor market regulation by antitrust scholars and enforcers, creating an unprecedented reform effort to apply antitrust law to employers’ conduct. 1 Proposals range from more aggressive civil and criminal enforcement against wage-fixing and no-poaching agreements2 to expanding the Sherman Act’s monopolization standards to incorporate anticompetitive employer conduct.3 Most prominently, however, they concentrate on more thorough Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) merger review to reduce labor market concentration and prevent its unilateral and coordinated effects—reduced hiring resulting in under-, mis-, and unemployment, artificially suppressed 42394-ckt_95-1 Sheet No. 23 Side B 06/12/2020 13:18:38 1. See Hiba Hafiz, Labor Antitrust’s Paradox, U. CHI. L. REV. (forthcoming 2020); Alexander Colvin & Heidi Shierholz, Noncompete Agreements (Econ. Pol’y Inst. Dec. 10, 2019), https://www.epi.org/publication/noncompete-agreements/; David Arnold, Mergers and Acquisitions, Local Labor Market Concentration, and Worker Outcomes (Oct. 2019), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3476369; Eric Posner, The Antitrust Challenge to Covenants Not to Compete in Employment Contracts (Sept. 13, 2019) (unpublished manuscript), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3453433 [https://perma.cc/8QZ7-62C9]; José Azar et al., Estimating Labor Market Power (Sept. 2019), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3456277; Ioana Marinescu & Herbert Hovenkamp, Anticompetitive Mergers in Labor Markets, 94 INDIANA L.J. 1031 (2019); Suresh Naidu & Eric Posner, Labor Monopsony and the Limits of the Law (Jan. 13, 2019) (unpublished manuscript), https://ssrn.com/abstract=3365374 [https://perma.cc/ZE5S-2ZJG]; Ioana Marinescu & Eric Posner, Why Has Antitrust Law Failed Workers?, 104 CORNELL L. REV. (forthcoming 2020), https://ssrn.com/abstract=3335174 [https://perma.cc/P39V-48FC] [hereinafter Marinescu & Posner, Why Has Antitrust]; BRIAN CALLACI, Vertical Restraints and the Creation of the Fissured Workplace, in THE HISTORICAL AND LEGAL CREATION OF A FISSURED WORKPLACE: THE CASE OF FRANCHISING 45-72 (2019); Evan Starr, THE USE, ABUSE, AND ENFORCEABILITY OF NON-COMPETE AND NO-POACH AGREEMENTS (2019), https://eig.org/wp-content/uploads/2019/02/Non-Competes-2.20.19.pdf [https://perma.cc/G3JS-E4FR]; Suresh Naidu et al., Antitrust Remedies for Labor Market Power, 132 HARV. L. REV. 536, 556-60 (2018); Ioana Marinescu & Eric Posner, A Proposal to Enhance Antitrust Protection Against Labor Market Monopsony (Roosevelt Inst. Working Paper No. 11, 419, 2018), https://rooseveltinstitute.org/wp-content/uploads/2019/01/RI_ ProposalToEnhanceAntitrustProtection_ workingpaper_11419-1.pdf [https://perma.cc/9GW8-H5DD] [hereinafter Marinescu & Posner, Proposal to Enhance]; José Azar et al., Concentration in U.S. Labor Markets: Evidence from Online Vacancy Data (IZA DP Working Paper No. 11379, 2018), http://ftp.iza.org/dp11379.pdf [https://perma.cc/8GPY-9G8J]; David Berger et al., LABOR MARKET POWER (2018), https://ideas.repec.org/p/red/sed018/170.html [https://perma.cc/CLU8-XDLC]; Arindrajit Dube et al., Monopsony in Online Labor Markets (NBER Working Paper No. w24416 (Mar. 20, 2018), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3143341 [https://perma.cc/S72L-8PE5]; Alan Krueger & Orley Ashenfelter, Theory and Evidence on Employer Collusion in the Franchise Sector (NBER Working Paper No. 24831, (...truncated)