WASHINGTON, D.C. — The Federal Trade Commission (FTC) has taken action against Guardian Service Industries, Inc., a New York- and New Jersey-based building services contractor, over the company’s use of no-hire agreements that restricted employees’ job mobility and suppressed competition in the building services industry. Under a proposed consent order, Guardian must immediately cease enforcing these agreements, marking a significant step in protecting workers’ rights and promoting fair labor practices.
The FTC alleges that Guardian included no-hire clauses in its customer service contracts with residential building owners, prohibiting them and competing service providers from hiring Guardian employees. These agreements applied even after the termination of a building’s contract with Guardian, effectively limiting job opportunities for hundreds of employees, including concierge staff, custodians, and maintenance technicians. According to the FTC, the agreements forced many workers to leave their jobs when building management changed, ultimately restricting their opportunities for higher wages, better benefits, and improved working conditions.
“Guardian, operating as a middleman, has restricted building owners and competitors from hiring workers while also forcing mostly low-wage employees to accept unfair employment terms that restrain job mobility, wage growth, and their economic freedom,” said Henry Liu, Director of the FTC’s Bureau of Competition.
Proposed Consent Order Requirements
The proposed consent order outlines several measures to restore competition and employee rights:
- End to No-Hire Agreements: Guardian is prohibited from enforcing or communicating the existence of any no-hire agreement to current or prospective customers.
- Notification Requirements: Guardian must notify its customers and employees that the no-hire agreements are null and void and provide them with a copy of the FTC’s order. This notice must also be displayed prominently in shared employee spaces and provided to all new hires.
- Voiding Existing Agreements: Guardian must formally void all existing no-hire agreements and confirm their nullification in writing to FTC staff.
- Protection Against Fees and Penalties: The order explicitly prohibits Guardian from imposing fees or penalties on individuals affected by the now-terminated agreements.
Implications for Workers’ Rights and Competition
This action is an example of the FTC’s efforts to protect workers from unfair practices that limit their economic freedom. No-hire agreements, which are gaining increased scrutiny nationwide, have been criticized for stifling labor market competition and disproportionately harming low-wage employees by reducing leverage for negotiating better employment terms.
By working closely with the New York and New Jersey Attorneys General throughout the investigation, the FTC has showcased a collaborative approach toward addressing restrictive labor practices. This case sends a clear message that anticompetitive agreements violating workers’ rights will not be tolerated, ensuring a fairer, more competitive labor market moving forward.
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