Duane Morris Class Action Review - 2023 - Report - Page 43
In contrast to traditional anticompetitive conduct, the courts are less familiar with
anticompetitive conduct within labor markets. The courts have had less experience with
labor monopsony issues than they do with more established antitrust causes of action in
the context of mergers that are alleged to create monopoly levels of market power, or
agreements among competitors to fix prices at supracompetitive levels.
The plaintiffs’ class action bar and the antitrust authorities under the Biden
Administration have argued that labor markets are not conceptually distinct from product
or services markets for antitrust purposes, and that the courts should simply apply rules
from traditional antitrust markets to the new focus on labor markets. In particular, the
line of cases dealing with competitors fixing prices or divvying up markets in product
markets have treated these behaviors as “per se” violations, or, presumptively illegal,
while other conduct is analyzed under a “rule of reason” approach that balances
anticompetitive impact with pro-competitive justifications. More specifically, plaintiffs
argue that, if wage-fixing or no-poach agreements in labor markets should be treated as
analogs to price-fixing and market allocation in traditional markets, then plaintiffs should
receive the significant benefits of a per se analysis of their allegations. Because per se
and rule of reason cases involve drastically different evidentiary burdens and
presumptions even at the pleading stage, litigants have seriously contested this issue.
An illustrative example of this debate is shown by the no-poach litigation captioned
Deslandes, et al. v. McDonald's USA, LLC, 2022 U.S. Dist. LEXIS 113524 (N.D. Ill.
June 28, 2022).
In 2022, the question of whether per se treatment or rule of reason treatment applies
continued to be the primary battleground in antitrust class actions. Indeed, in the class
action context, whether the court analyzes the no-poach agreements under the per se
or rule of reason test is often the critical issue driving the outcome of whether the
plaintiffs can satisfy the class certification requirements of Rule 23. This is because a
rule of reason analysis requires plaintiffs to define the market or markets where antitrust
harm occurred, which could implicate hundreds of thousands of local labor markets,
each requiring an individualized inquiry that overwhelms the commonality necessary for
class certification. Because per se analysis presumes harm and does not consider procompetitive justifications, the plaintiffs in such cases are relieved of having to define any
relevant market where harm occurred. Thus, the plaintiffs are able to avoid the threat
that a court will foresee highly individualized market inquiries in the court’s class
certification analysis. We are likely to see continued battles over per se or rule of reason
treatment in no-poach antitrust class actions in the future.
Plaintiffs in antitrust actions often seek class certification under Rule 23(b)(3), which,
after all of the requirements of Rule 23(a) have been met, allows for class certification
where common questions of law or fact predominate, and a class action is a superior
method of adjudication. The predominance requirement involves a fact intensive inquiry
into the availability and adequacy of “class-wide evidence” and continued to be a
battleground for antitrust litigants in 2022 as shown by Olean Wholesale Grocery Coop.,
Inc., et al. v. Bumble Bee Foods LLC, 31 F.4th 651 (9th Cir. 2022). Even where class
certification is contested on multiple fronts, predominance frequently becomes the locus
of attention where dueling experts may impact a court’s analysis of how and to what
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Duane Morris Class Action Review – 2023