Justice News

Assistant Attorney General Jonathan Kanter of the Antitrust Division Delivers Remarks at Howard Law School
Washington, DC
United States
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Thursday, January 12, 2023

Introduction

Thank you for the kind introduction. I am so excited to be here today at this amazing and inspiring institution. Dean Holley and Professor Gavil, you are building leaders that will change our society to make it more fair and more free.  

After my remarks I am excited to take questions and learn more from the students here.

I have the incredible honor to be the Assistant Attorney General of the Antitrust Division at the Department of Justice (DOJ). The DOJ is the only cabinet agency with a moral ideal in its name. The Department has a solemn obligation to help ensure Justice for the American people. At the Antitrust Division, we aspire to fight for and win economic justice.

I wake up every day in awe of the team at DOJ and how hard they fight for that mission. I see a lot of students in the audience and let me say, we could use your help.

When I think about economic justice, I think about how much the economy shapes people’s lives. At the Antitrust Division, one of our favorite Howard alumni is former Supreme Court Justice Thurgood Marshall. He wrote in Topco that the “[a]ntitrust laws . . . are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms.”[1]

And Americans are more than just consumers. Americans are workers, creators, and inventors. Freedom and justice in the economy mean that everyone has a fair opportunity on a level playing field. We all deserve competition for our labor and our ideas.

Antitrust Protects Real People

I know those sound like lofty, generic ideals. But they are important to real people, every day. As you are probably learning in constitutional law, the rights that lawyers talk about in the abstract can have profound impacts on people’s daily lives. The same is absolutely true for the economic justice that we at the Antitrust Division help to protect.

Let me spend a few minutes today on some recent examples that underscore the kind of work we are doing.

  1. Shawne Alston

You all know how expensive an education can be. Shawne Alston grew up in Hampton, Virginia, and played football at Phoebus High School. In college, he was a running back for the West Virginia Mountaineers, rushing for over 1,000 years and 19 touchdowns. Throughout college, he was on a grant-in-aid for his four seasons at WVU, which covered parts of his education costs.[2]

Shawne Alston’s football scholarship could not cover all his college costs, though. The NCAA restricted compensation for student-athlete labor. So West Virginia could claim that it was up against a compensation cap. But that compensation cap was agreed to among all the NCAA schools.

Think about how competition should work for workers. Multiple employers bid up the salary until the worker gets a competitive price. The NCAA, however, was a collection of all the colleges Alston would have wanted to play for. They had set a cap for pay, agreeing on compensation instead of competing over it. 

That’s exactly the sort of conduct the antitrust laws prohibit. The good news is that Shawne Alston had good lawyers and sued under the antitrust laws. The Antitrust Division filed an amicus brief supporting him in the Supreme Court, arguing that the antitrust laws protect workers too, and as a result, student athletes are guaranteed the same economic justice and legal protections as other workers.[3] The Supreme Court ruled in a 9-0 decision that the NCAA could not agree to limit the education-related benefits offered to student athletes.[4] In his concurrence, Justice Kavanaugh drove it home - “price-fixing labor is price-fixing labor” and “the NCAA is not above the law.”[5]

  1. Poultry Processing Workers

At the Antitrust Division, we have a wide range of cases advocating for competition in the labor market. It might surprise you to know that for many years, the Antitrust Division devoted very few resources to protecting workers. But we are changing that. And one decision at a time, we are winning economic justice and the courts are reaffirming that the antitrust laws protect workers too.[6]

Another example is our recent case protecting poultry processing-plant workers. A Division investigation found that coordination among poultry processors was depriving workers of competition for their labor. We won an $85 million settlement and a commitment from the companies to change their practices. [7]

  1. Nurses

We have also uncovered collusion to deprive nurses of competition for their labor. The Division’s criminal program prosecutes employers who agree to fix wages or to allocate workers by agreeing with other employers not to poach one another’s employees.

Recently, we uncovered an agreement among competing employers not to raise the pay of nurses serving medically-fragile students in a school district in Las Vegas.[8] These are nurses helping kids. Could you imagine someone more deserving of the fair wage that results from competition for their labor? As a result of our case, the company paid $72,000 in restitution to the nurses affected.

  1. Authors

We have also seen how mergers can harm workers and creators. The Division demonstrated this in its pathbreaking case this past year against the massive merger between book publishers Penguin-Random House and Simon & Schuster.[9] We all deserve competition for our creative ideas, and writing books is critical work. We need authors and ideas in our society. In our investigation of this publisher merger, we saw that the merging companies often bid against each other for top selling books. So the pay authors earn depends on competition between publishers.

One of the impacted authors would have been Steven King, who actually testified in support of our case at trial last fall. Mr. King explained how authors depend on competition among publishers to earn their advances and be able to do their work. If authors made less money, they’d ultimately write fewer books. The district court in the District of Columbia agreed with our case, and entered an opinion prohibiting the merger and reaffirming that harm to a labor market is sufficient to prohibit a merger.[10]

  1. Leinani Deslandes

Those were wins. The outcome in my last two examples are still in question. First, there is Leinani Deslandes’ case against the McDonald’s franchise employer no-poach agreement. Ms. Deslandes started as a fry cook at McDonalds earning $7 an hour. But she worked her way up. Finally, she was training for a management position and nearly got a job offering her better shifts and better pay. That’s supposed to be the upward mobility you can earn in America.

But similar to the price-fixing Shawne Alston attacked, Deslandes alleges she was blocked from better pay by a no-poach agreement among competing employers. The job offer she got was from a competing McDonald’s franchise, but McDonald’s and its franchisees had agreed that the franchisees would not hire each other’s workers. So Deslandes, they said, could not take the new management role, or the better hours and pay.

Agreements among competing employers not to hire each other’s workers restrain competition and deprive those workers of economic justice. Deslandes earned and deserved that promotion. But her would-be employer had an agreement not to compete for workers with other McDonald’s franchisees, and so she lost out. Think about that. I think about how many people something like that impacts.

Deslandes sued McDonald’s, and that case is pending in the Seventh Circuit court of appeals.[11] The Antitrust Division filed an amicus brief affirming the important role that antitrust law plays in protecting workers, even when franchise businesses are involved.[12] Employers must compete for employee labor, from fast-food-franchiser to law firms full of associates.  

  1. Transmigrante Forwarding

My final example reflects work we are doing to reinvigorate Section 2 of the Sherman Act, which prohibits, and criminalizes, monopolization and attempts and conspiracies to monopolize. We recently obtained a guilty plea in the first criminal Section 2 case the Division has brought since 1977.[13] Congress made monopolization a felony, and when appropriate we are prosecuting monopolization criminally.

In the Transmigrante forwarding industry in Texas, forwarding agencies help individuals transport used vehicles and goods across the US-Mexico border for resale in Central America. In a recent indictment we alleged a conspiracy to monopolize this market. Agency owners and industry participants who refused to participate in the monopolization and other schemes were subjected to threats, intimidation, and acts of violence against themselves and their families, employees, associates, and businesses.[14]

Conclusion – Competition Has Vast Impacts and We Need Your Help

Let me conclude by saying that while these stories play out for individuals, they are having massive impacts on our economy overall. Underenforcement of antitrust laws has led to competition challenges across our economy.

Concentration has grown in massively important sectors like health care, financial services, and agriculture.[15] Many studies suggest we simply have less competition in the American economy today than we did even just twenty or thirty years ago. The impacts of all these stories, in the aggregate, are enormous. For example, economist Thomas Phillopon calculates that “a return to the level of competition prevailing in the United States in the late 1990s would add about $1.44 trillion to labor income in the United States.”[16]

$1.4 trillion. Even if it’s just a fraction of that number, it’s mind-blowing. The dollars taken out of the pockets of Shawne Alston, the Las Vegas nurses, and Leinani Deslandes add up. They add up to an economy that needs to do better to deliver economic justice for the American people.

We are so excited about that mission at the Antitrust Division. We are fighting and we are driving change. I should mention that we are also hiring regularly these days. We need smart and dedicated interns, honors attorneys, and laterals. I hope more than a few future Division enforcers are here today.

Thank you.

 

[1] United States v. Topco Assocs., Inc., 405 U.S. 596, 610 (1972).

[2] In Re: NATIONAL COLLEGIATE ATHLETIC ASSOCIATION ATHLETIC GRANT-IN-AID CAP ANTITRUST LITIGATION., 2018 WL 11373136, Testimony of Plaintiff, Shawne Alston – Direct Examination (N.D.Cal. Sept. 7, 2018)

[3] Brief for the United States as Amicus Curiae Supporting Respondents, NCAA v. Alston, 141 S. Ct. 2141, 210 L. Ed. 2d 314 (2021), https://www.justice.gov/sites/default/files/briefs/2021/03/11/20-512bsacunitedstates.pdf.

[4] NCAA v. Alston, 141 S. Ct. 2141, 210 L. Ed. 2d 314 (2021).

[5] Id. at 2167.

[6] United States v. Jindal, No. CV 4:20-CR-00358, 2021 WL 5578687, at *5 (E.D. Tex. Nov. 29, 2021) (holding that “[t]he antitrust laws fully apply to the labor markets, and price-fixing agreements among buyers—like therapist staffing companies—are prohibited by the Sherman Act”); United States v. DaVita Inc., No. 1:21-CR-00229-RBJ, 2022 WL 266759, at *8 (D. Colo. Jan. 28, 2022) (finding that “if naked non-solicitation agreements or no-hire agreements allocate the market, they are per se unreasonable”).

[7] See https://www.justice.gov/opa/pr/justice-department-files-lawsuit-and-proposed-consent-decrees-end-long-running-conspiracy.

[8] See https://www.justice.gov/opa/pr/health-care-company-pleads-guilty-and-sentenced-conspiring-suppress-wages-school-nurses.

[9] See https://www.justice.gov/opa/pr/justice-department-sues-block-penguin-random-house-s-acquisition-rival-publisher-simon.

[10] United States v. Bertelsmann SE & Co. KGaA, No. CV 21-2886-FYP, 2022 WL 16748157(D.D.C. Nov. 7, 2022).

[11] Deslandes v. McDonald's USA, LLC, No. 17 C 4857, 2022 WL 2316187 (N.D. Ill. June 28, 2022), appeal docketed, No. 22-2333 (7th Cir. July 27, 2022).

[12] Brief for the United States America and the Federal Trade Commission as Amicus Curiae in Support of Neither Party, Leinani Deslandes, Stephanie Turner, et al. v. McDonald’s USA LLC, et al., No. 22-2333 (7th Cir.), https://www.justice.gov/atr/case-document/file/1552391/download.

[13] See https://www.justice.gov/opa/pr/executive-pleads-guilty-criminal-attempted-monopolization.

[14] See https://www.justice.gov/opa/pr/criminal-charges-unsealed-against-12-individuals-wide-ranging-scheme-monopolize-transmigran-0.

[15] Claire Kelloway and Sarah Miller, “Food and Power: Addressing Monopolization in America’s Food System,” (Washington: Open Markets Institute 2019), https://www.openmarketsinstitute.org/publications/food-power-addressing-monopolization-americas-food-system (agriculture); Jeremy C. Kress, “Reviving Bank Antitrust,” 72 Duke L.J. 519 (2022) (financial services).

[16] Thomas Philippon, “Causes, Consequences, and Policy Responses to Market Concentration,” at 26 (Aspen Economic Strategy Group, Nov. 21 2019), https://www.economicstrategygroup.org/wp-content/uploads/2019/12/Maintaining-the-Strength-of-American-Capialism-Causes-Consequences-and-Policy-Responses-to-Market-Concentration.pdf.

Topic(s): 
Antitrust
Component(s): 
Updated January 23, 2023