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University of Chicago Law Review

Abstract

At the close of 2020 and start of 2021, for the first time in its history, the Department of Justice (DOJ) brought criminal antitrust charges against monopsonistic employers for entering into wage-fixing and no-poach agreements. Both employers pled not guilty and were acquitted in April 2022. In light of these developments, this Essay evaluates criminal law enforcement as a response to the problem of labor monopsonies. From a due process perspective, no-poach agreements are not conclusively per se illegal under the Sherman Act, and prosecuting activities governed by the alternative standard—the rule of reason—raises fair notice concerns. The DOJ, however, has thus far been disciplined and only prosecuted horizontal agreements that are presumptively anticompetitive—even if they are in the novel context of labor markets.

The principle of fair notice still has implications, however, for determining whether criminal law enforcement creates the optimal level of deterrence against labor monopsonies or unduly chills productive economic activity. All in all, there are critical differences between labor monopsonies and other anticompetitive arrangements that render criminal prosecution less likely to overdeter. Labor monopsonies harm workers’ consumer welfare, and there is less reason to defer to firms when the employee should be the most relevant decision maker.

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