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DOL and FTC Sign Memorandum to Collaborate on Areas of Mutual Interest, Including Misclassification of Workers as Independent Contractors

The U.S. Department of Labor (DOL) and the Federal Trade Commission (FTC) announced a new Memorandum of Understanding (MOU) between the agencies to promote competition in U.S. labor markets and put an end to unfair, deceptive, and other unlawful acts and practices, as well as unfair methods of competition, that harm workers. In particular, the MOU outlines the ways in which DOL and the FTC will work together on key issues such as labor market concentration, one-sided contract terms, and labor developments in the “gig economy.”

The new agreement enables DOL and the FTC to closely collaborate by sharing information, conducting cross-training for staff at each agency, and partnering on investigative efforts within each agency’s authority. In particular, the MOU identifies areas of mutual interest for the two agencies, including: (1) the use of business models designed to evade legal accountability, such as the misclassification of employees; (2) the impact of algorithmic decision-making on workers; (3) illegal claims and disclosures about earning and costs associated with work; (4) the imposition of one-sided and restrictive contract provisions, such as training repayment agreements and non-compete agreements; (5) the extent and impact of labor market concentration; and (6) collusive behavior. The MOU is available here for review.

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