An FTC Shot at the Buzzer
With just days left in power, the Biden-Harris Federal Trade Commission says independent contractors may be able to collectively bargain.
Less than one week before President Trump is inaugurated—and knowing that he intends to replace Federal Trade Commission Chairwoman Lina Khan—the FTC on Tuesday became the latest agency during the Biden-Harris administration to try and give union organizers a legal path to target independent contractors.
The FTC, in the policymaking equivalent of a buzzer-beater shot, issued a statement saying that independent contractors, and specifically “gig workers,” may be shielded from antitrust liability when engaging in protected bargaining and organizing activities, such as seeking better compensation and job conditions.
With this move, the FTC joins the U.S. Labor Department and National Labor Relations Board in attempting to push a policy agenda focused on targeting independent contractors for unionization. As the U.S. Chamber of Commerce previously noted, this “whole of government approach” by the Biden-Harris administration has been an unprecedented effort to mobilize the entire apparatus of the federal government to promote unions.
The FTC’s move follows several indications since 2021 that the commission intended to broaden its reach into independent-contractor policy, albeit differently than other recent attempts. While the USDOL’s action under the Biden-Harris administration centered on the Fair Labor Standards Act, and while the NLRB acted on the National Labor Relations Act, the FTC’s statement this week focuses on the Clayton Antitrust Act of 1914 and the Norris-LaGuardia Act of 1932.
The Clayton Act deals with unlawful contracts, corporate mergers and acquisitions, and situations where a person serves as a director of multiple competing companies.
The Norris-LaGuardia Act barred the federal courts from issuing injunctions to prevent strikes, picketing or boycotts by labor groups, and made “yellow-dog contracts” unenforceable. In such contracts, workers agree as a condition of employment not to join a labor union.
“Companies increasingly rely on gig workers and independent contractors,” Khan stated in a press release. “As more of these workers consider unionizing to secure better pay and conditions, the FTC is making clear that the antitrust laws do not stand in the way of their efforts to collectively organize or bargain.”
Notably, the FTC voted 3-2 to approve the policy statement. The two no votes were Trump’s incoming FTC chairman, Andrew Ferguson—who says he wants to reverse Khan’s anti-business agenda—and commissioner Melissa Holyoak.
Ferguson issued a dissenting statement about this week’s FTC announcement, joined by Holyoak. It was blunt:
“I dissent from the Commission’s issuance of this new enforcement policy statement regarding the labor exemption from the antitrust laws mere days before the inauguration of President Trump. As I have said before, this is not the time for the Biden-Harris Commission to announce policy changes, let alone declare how the agency will exercise prosecutorial discretion going forward. Indeed, it is senseless for the Biden-Harris Commission to announce, on its way out the door, its plans for the future. It has no future.”
That last bit is undeniably true.
President Trump returns to the Oval Office on Monday, at which point the policy shift could end up standing for less than a week overall before it’s reversed.
‘Gig Work.’ Sigh.
There is speculation that Khan issued the statement to try and position the Democratic Party to launch another wave of freelance-busting attacks, whenever the party regains power.
Khan’s beliefs about independent contractors do align with what we have heard again and again from countless Democrats in recent years. She made clear on a podcast in mid-December that she thinks about rideshare companies instead of the majority of independent contractors who earn income in entirely other industries.
She told the podcast’s host:
“We have seen at various points over the last couple of decades the law again being used against workers, specifically independent contractors who were looking to organize, say, with certain types of rideshare companies, so I’ve made clear during my tenure that I don’t believe that’s the kind of proper purpose of the antitrust laws.”
The message listeners received was that when talking about independent contractors, the most appropriate description is a rideshare driver who is being denied the right to join a union.
It’s a far different message than describing an independent contractor as being generally happy, which is what the majority of self-employed Americans have long been. As the U.S. Bureau of Labor Statistics reported just two months ago:
“As in prior surveys, independent contractors overwhelmingly preferred their work arrangement (80.3 percent), whereas 8.3 percent would prefer a traditional work arrangement.”
Portraying independent contractors as victimized rideshare drivers who are being denied unionization is also a far different message than calling us small-business owners, entrepreneurs, solopreneurs, LLC owners or S Corp owners, which is what millions of independent contractors actually are.
In fact, such “nonemployer firms” have long comprised the vast majority of the nation’s small businesses overall. These smallest of small businesses contribute $1.3 trillion to the U.S. economy.
By contrast, app-based “gig work” represents less than 10 percent of independent contracting across the United States, with most of that work being done only occasionally. Most app-based workers perform such work less than 10 hours per week.
Even so, the FTC, prior to Tuesday’s move in the final days of Khan being chairwoman, has tried to go after app-based companies in different ways, including with accusations of wage-fixing.
Issuing a policy statement specific to independent contractors and unionization was apparently the last idea on the list. It got squeezed in at the end.
The FTC’s policy statement—in keeping with the relentlessly false narrative we’ve all endured for years now about “gig work” being synonymous with independent contractors—cites “gig platforms” upfront and center as a key reason for the policy shift.
The FTC wrote:
“Across the U.S. economy, firms are turning to independent contracting models to accomplish work previously performed under traditional direct hire employment models. In particular, online gig platforms often seek to categorize their workers as independent contractors, even though in practice these firms may tightly prescribe their workers’ tasks and compensation in ways that run counter to the promise of independence.”
And yet, as far too often happens with freelance-busting missives that cite “gig work” as a primary concern, the FTC later concludes that its policy shift applies to all types of independent contractors, including those who are legitimately self-employed:
“The Commission believes that workers who provide labor services are not subject to antitrust liability when engaging in protected collective action—such as seeking better compensation and job conditions—even if the firm whose labor practices the workers seek to improve classifies (or misclassifies) them as independent contractors.”
We’ll all find out together, on or after Monday and the start of the Trump-Vance administration, whether this policy shift by the FTC will remain in place.
My advice: Try to have a restful weekend.