FTC Withdraws From Memorandum of Understanding on Interagency Cooperation to Review M&A Work

The Federal Trade Commission (FTC) announced it will withdraw from its memorandum of understanding on labor issues in merger investigations a month after signing a memorandum of understanding with three other agencies. The memorandum of understanding of August 28, 2024 outlined cooperation in examining the possible impact of mergers and acquisitions on labor markets. (For details, see our article, Department of Justice, FTC, DOL and NLRB Memorandum of Understanding Continues Focus on Employee Implications of M&A Agreements.)

In its September 27, 2024 announcement, the FTC provided no explanation for its withdrawal, stating only: “The Agency will continue to carefully review all merger-related matters, including potential labor impacts, consistent with its merger guidance.”

Given that the MOU appeared to primarily benefit the FTC (along with the Antitrust Division of the Department of Justice) while imposing few (if any) obligations on the FTC, it is difficult to speculate as to the reason for the FTC’s decision to withdraw.

Although not specifically stated in the FTC’s announcement, this withdrawal does not appear to affect the 2022 Memorandum of Understanding between the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) on Information Sharing, Interagency Training and coverage in areas of common regulatory interest or the 2023 Memorandum of Understanding between the U.S. Department of Labor and the Federal Trade Commission.

Despite this rollback, parties considering mergers or acquisitions should continue to expect that the FTC and the Department of Justice will continue to focus more on the labor impacts of the transaction when conducting antitrust reviews under the Hart-Scott-Rodino Act.