Today, the Federal Trade Commission took its latest enforcement action to free American workers from labor practices that limit wage and job growth by ordering building services contractor Adamas Amenity Services LLC (Adamas) and its affiliated businesses to cease their enforcement of no-hire agreements.
Adamas used anticompetitive no-hire agreements that restrict building owners and management companies across New Jersey and New York City from directly hiring workers employed by Adamas without a significant penalty, according to the FTC’s complaint. For Adamas employees, which are mainly low-wage workers performing janitorial, front desk, security and other services, these no-hire agreements limit their ability to negotiate higher wages, better benefits, and improved working conditions, the FTC’s complaint alleges.
To resolve the FTC’s complaint, Adamas is required to immediately cease enforcing all existing no-hire agreements under a proposed FTC order.
“American workers have a right to pursue job opportunities that offer them higher pay and better benefits. Yet anticompetitive no-hire agreements, just like the ones Adamas uses, prevent workers from realizing their full earning potential,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. “The Trump-Vance FTC took action today against Adamas and will continue to take enforcement action to protect workers from harmful labor practices that lower paychecks and limit opportunities.”
Under Chairman Andrew N. Ferguson, the FTC has made it a priority to investigate and prosecute deceptive, unfair, and anticompetitive labor-market practices that harm workers. These actions have included recent action in Gateway Services, Inc., which stopped the enforcement of nearly 1,800 noncompete agreements, issuing a call for the public to identify anticompetitive noncompetes, and launching a cross-agency Joint Labor Task Force.
The FTC, which worked closely with the New Jersey Attorney General’s office throughout the investigation, alleges Adamas’ no-hire agreements also prevent building owners and management companies from indirectly hiring Adamas’ employees through any competing building service contractor. As a result, Adamas employees suffer hardship if the building where they work changes management because the no-hire agreement forces them to leave their jobs in some circumstances, the FTC’s complaint alleges.
Adamas’ no-hire agreements also limit the ability of building owners to seek or accept bids from any of Adamas’ competitors due to the chance of losing long-serving employees. This restricts the ability and incentive for any Adamas competitors to make investments and meet customer demand for increased quantity, quality, and variety of building services, according to the FTC’s complaint.
Under the proposed consent order, Adamas is subject to additional conditions which include that it must:
- Provide written notice to customers subject to a no-hire agreement within the last three years that the no-hire agreement restriction is null and void.
- Post clear and conspicuous notice that employees are not subject to no-hire agreements and may seek or accept a job with the building directly, or any company that wins the building’s business.
The Commission vote to issue the complaint and accept the proposed consent agreement for public comment was 2-0.
The public will have 30 days to submit comments on the proposed consent agreement package. Instructions for filing comments appear on the docket. Once processed, they will be posted on Regulations.gov.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.