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Wednesday, February 14, 2018

Anti-Competitive Job Markets and Wage Fixing in Academia and the Au Pair Industries

In the past few years, more attention is being devoted to anti-competitive practices in the labor market. A few years ago I wrote a book called Talent Wants to be Free: Why We Should Learn to Love Leaks, Raids, and Free-Riding (Yale Press). The thesis was that through contractual clauses primarily between employees and employers as well as employer-employer we are creating controls over human capital that suppress job mobility and in turn harm innovation and economic development. I was thrilled when in the summer of 2016 I was invited to present this research (I also published several related law review articles on the subject for example here and here and here) at the White House. I became part of a White House working group on non-compete policy which eventually resulted in a President's Call for Action to the States. A parallel and very much connected development has been to apply the antitrust lens on human capital practices, for example, the antitrust investigation and subsequent class actions against Silicon Valley giants which agreed to not hire each other's employees. In 2016 the FTC and DOJ issued a guidance on how antitrust applies to hiring and wage fixing and DOJ has warned that moving forward it will criminally prosecute such anti-competitive practices as no-hire agreements and wage fixing between competitors.  

Two new cases continue the development of this new area of law. First, interesting for us professors and the lateral hiring market, last week a North Carolina federal judge certified a class of faculty from the University of North Carolina medical school and Duke University in a lawsuit over allegedly anti-competitive no-hire agreements. Second, on the compensation and wage fixing front, and a very different job market, a federal judge certified last week a class of 90,000 Au Pair nannies. I am quoted yesterday in this BusinessWeek article about the case. The case is particularly interesting to me because it brings me back full circle to the first law review article I ever published -- when I was a student at Harvard Law I wrote a seminar paper which I then published called Class and Care: The Roles of Private Intermediaries in the In-Home Care Industries in Israel and the U.S., Harvard Journal of Law and Gender. You might even say I was long awaiting this class action that would expose some of the exploitative practices in this vulnerable industry. 



Posted by Orly Lobel on February 14, 2018 at 04:48 PM | Permalink


Thanks for that interesting post .It is argued there in that article ( where you are quoted ) that those agencies , claim that , it is all backed by government . The judge it seems , has refuted it , as baseless . I have read the act ( applicable it seems , " 1890 Sherman Antitrust Act " ) and later certain amendment to it , nothing there suggest it seems that it does touch wages . Rather commerce and trade . How do we know , that legally it is included at first place ? Typically , all over the world , wages have to do with labor market or social laws , not trade and commerce ,how is it in the US I was wondering ? Finally , you are quoted as arguing that :

“If the agencies were truly competing against each other in recruiting au pairs, there would be more of a race to the top……There is no reason that each au pair, regardless of her prior experience and education level, would all just work for minimum wage….. "

End of quotation :

But minimum wage , or above it , typically , has to do mainly with supply and demand . One should suggest first , that the supply is the issue , and not the demand , and all , as a threshold for suspecting , that wages had to rise over interfacing or touching minimum wage .


Posted by: El roam | Feb 14, 2018 6:18:22 PM

One may observe , the :

" Restrictive Trade Practices Law, 5748-1988 " ( Israel ) , and there , article 3 :

3. Arrangements which are Not Restrictive

Clause 9 dictates that :

(9) An arrangement to which a trade union or an employers’ association is party, involving restraints, all of which relate to the employment of workers and to working conditions.
That is an example , how labor markets , or employment laws etc… are excluded from antitrust regulation ( at least in that domain of : restrictive arrangements ) .

One may reach the law here :



Posted by: El roam | Feb 14, 2018 7:33:10 PM

El roam:
In English punctuation marks don't get spaces before them. HTH

Posted by: jack | Feb 14, 2018 8:43:59 PM

I have posted here a comment to Jack above ( replying in fact ) . It seems that the comment has been deleted or alike disappeared . Please post it ( whoever is in charge , and if deliberately done (what I can't seem even to think why and how) please , provide a coherent and clear explanation for it ) . Thanks

Posted by: El roam | Feb 15, 2018 4:49:26 AM

Hi, I don't think anyone removed your comment, feel free to repost. re your observation about whether the government program regulates the wages, that indeed will be at the heart of the case - the government I believe is stating that the Au Pair program presents a floor not a ceiling of minimum wage.

Posted by: Orly Lobel | Feb 15, 2018 3:33:27 PM

OK Orly , thanks ....hereby re posted again :

Jack , in yours , not mine ...... first , you will have to know one thing or two about English ( no offense ) . And typically , you have seen a systematic and deliberate act . So , surly I have good reason for it . So , first ask politely ( is there any particular reason for it ) and then , you may express your considered opinion .

To your kind attention

Posted by: El roam | Feb 15, 2018 7:13:32 PM

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