Settlement agreement with US Department of Justice demonstrates risks associated with sharing information with third parties

August 1, 2022

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On July 25, 2022, the U.S. Department of Justice (“DOJ”) entered into an $84.8 million settlement agreement[1] with several poultry processing companies over allegations that poultry processors conspired to share salary and benefits information through third-party data aggregation companies.[2] The companies entered into the settlement without admitting any wrongdoing or liability. In addition to the $84.8 million restitution payment, the settlement agreement also imposed a court-appointed compliance monitor for ten years to ensure compliance with the proposed settlement decree.[3] Government enforcement actions based on information sharing are rare,[4] and this settlement agreement includes important lessons for all companies that provide internal salary or benefits data to third parties, including consulting firms or business groups that engage in other information sharing with competitors.

The DOJ settlement is the latest in a series of aggressive antitrust enforcement to protect labor markets. Since the DOJ and Federal Trade Commission (“FTC”) 2016 Antitrust Guidance for Human Resource Professionals, the DOJ has openly expressed its intent to criminally prosecute wage fixing and non-hiring, non-poaching, and non-solicitation . Agreements. Over the past two years, the DOJ has given teeth to these threats, bringing criminal charges against several companies and individuals for alleged wage-fixing, non-poaching, and non-solicitation agreements.

Here, the DOJ alleged that three poultry processors engaged in a long-running conspiracy to exchange information about the wages and benefits of poultry processing plant workers and colluded with their competitors to deprive “a generation of poultry processing plant workers a fair wage set in a free and competitive labor market.[5] Additionally, the government alleged that the contractors coordinated the plot by sharing information with third-party data consulting firms.[6] and, most importantly, that the information exchanged was “current or future, disaggregated or identifiable in nature, which allowed poultry processors to discuss the wages and benefits they were paying poultry processing plant workers” .[7] Data consultancy firms also held in-person meetings where, according to the government, poultry processors “shared additional compensation information and collaborated on compensation decisions.”[8]

Key to the government’s case, the complaint alleges poultry processors failed to meet Safe Harbor requirements for information sharing outlined in the 2016 guidelines.[9] Under this guidance, information sharing is unlikely to have anti-competitive effects when “[1] a neutral third party manages the exchange, [2] the exchange relates to relatively old information, [3] the information is aggregated to protect the identity of the underlying sources, and [4] enough sources are aggregated to prevent competitors from linking particular data to an individual source.[10] The DOJ alleged that poultry processors were ineligible for Safe Harbor because their information was current or future, disaggregated, and identifiable.[11]

Going forward, Safe Harbor — which the DOJ and FTC have long used in contexts beyond labor markets — may be revised following President Biden’s July 2021 executive order on promoting competition. in the American economy. Section 5(f) of the order directs “the Attorney General and the Chairman of the FTC. . . consider whether to revise the October 2016 Antitrust Guide for Human Resources Professionals” to “better protect workers against wage collusion”.[12] The executive order fact sheet suggests that these revisions may be aimed at information sharing: “the president . . . [e]encourages the FTC and DOJ to strengthen antitrust guidelines to prevent employers from collaborating to suppress wages or reduce benefits by sharing wage and benefits information.[13] To date, the guidance on information sharing has not changed.

Another noteworthy aspect of the settlement agreement is the imposition of ten-year monitoring. Antitrust violation watchdogs are rare and typically only last three years, even in the context of hardline criminal cartels.[14] The groundbreaking ten-year oversight agreement may be an indication that the new regime of antitrust authorities will seek oversights, including long-term ones, in future settlement agreements.

Take away food

  • Carefully evaluate benchmarking practices. Consider how sensitive information, including salaries and benefits, as well as pricing and production data, is shared with other industry players to ensure they are eligible for current safe harbor, meaning the exchange is operated by a third party, such as a trading group, and includes historical, aggregated, and anonymized information.[15]
  • Monitor developments in DOJ and FTC guidelines regarding information sharing, as the safe harbor provision for human resources may change as a result of the Executive Order on Promoting Competition in the Economy which orders DOJ and FTC leaders to “revise” the guidelines to “better protect workers from wage collusion.
  • Recognize that antitrust authorities will use antitrust laws to protect labor markets. They are particularly interested in protecting low-wage workers from antitrust violations, but employers in other areas should not be complacent, as enforcement has included behaviors involving skilled labor and highly paid professionals.

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[1] See Proposal for final judgmentUnited States v. Cargill Meat Solutions Corp., et al., (July 25, 2022), here, [hereinafter Proposed Settlement]. The data analytics companies and their executives have entered into a separate settlement agreement. See Proposal for final judgment, United States v Webber, Meng, Sahl and Company (July 25, 2022), here.

[2] See Complaint, United States v Webber, Meng, Sahl and Company (July 25, 2022), at ¶ 5 [hereinafter Complaint].

[3] Proposed settlement at 12-17.

[4] This is the DOJ’s first antitrust case involving information sharing since 2016. See Complaint, United States v DirectTV Group Holdings, LLC and AT&T, Inc. (November 2, 2016), here.

[5] See Complaint at ¶ 4.

[6] Identifier. at ¶¶ 75–152.

[7] Identifier. at ¶ 75.

[8] Identifier. at ¶ 85.

[9] Identifier. at ¶ 88.

[10] See Department of Justice, Antitrust Division & Federal Trade Commission, Antitrust Guidance for Human Resources Professionals (October 2016), here.

[11] Complaint at ¶ 75.

[12] Executive Order Promoting Competition in the U.S. Economy (July 9, 2021), here.

[13] FACT SHEET: Executive Order Promoting Competition in the U.S. Economy (July 9, 2021), here.

[14] See Judgement, United States v AU Optronics Corporation (Oct. 2, 2012) (mandating a three-year monitoring).

[15] See Department of Justice, Antitrust Division & Federal Trade Commission, Statements of Antirust Enforcement Policy in health Care (August 1996), here (provided collection of information qualifies as a “safe area” when (1) collection is managed by a third party, (2) the data is more than three months old and (3) the data is sufficiently aggregated that recipients cannot identify an individual participant’s data).


The following Gibson Dunn attorneys prepared this client alert: Kristen Limarzi, Rachel Brass, Matt Butler and Nick Marquiss.

Gibson Dunn attorneys are available to answer any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any officer or member of the firm’s Antitrust and Competition or Labor and Employment practice groups:

Antitrust and Competition Group:
Kristen C. Limarzi – Washington, DC (+1 202-887-3518, [email protected])
Jeremy Robison – Washington, DC (+1 202-955-8518, [email protected])
Rachel S. Brass – Co-Chair, San Francisco (+1 415-393-8293, [email protected])
Stephen Weissman – Co-Chair, Washington, DC (+1 202-955-8678, [email protected])
Ali Nikpay – Co-Chair, London (+44 (0)20 7071 4273, [email protected])
Christian Riis-Madsen – Co-president, Brussels (+32 2 554 72 05, [email protected])

Labor and Employment Group:
Jason C. Schwartz – Co-Chair, Washington, DC (+1 202-955-8242, [email protected])
Katherine VA Smith – Co-Chair, Los Angeles (+1 213-229-7107, [email protected])

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Publicity for Lawyers: The enclosed materials have been prepared for general information purposes only and are not intended to provide legal advice.

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