Antitrust Worker Protections: The Rule of Reason Does Not Allow Counting of Out-of-Market Benefits

67 Pages Posted: 29 Apr 2022 Last revised: 4 Aug 2023

See all articles by Laura M. Alexander

Laura M. Alexander

Washington Center for Equitable Growth

Steven C. Salop

Georgetown University Law Center

Date Written: December 4, 2022

Abstract

Anticompetitive conduct toward upstream trading partners may have the effect of benefiting downstream consumers even as the conduct harms the firms’ workers or suppliers. Defendants may attempt to justify their upstream conduct—and may rely on the ancillary restraints doctrine in doing so—on the grounds that the restraints create efficiencies benefitting ` purchasers, rather than focusing solely on the impact of the restraint on the workers or suppliers in the upstream market. Such balancing of harms against out-of-market benefits achieved by a different group should be rejected by antitrust doctrine generally, and specifically in the case of harms to workers. This type of out-of-market balancing is not supported by either economic analysis or the basic goals of the antitrust laws. Antitrust’s consumer welfare prescription properly protects the trading partner participants (e.g., workers) in any relevant market who are harmed by anticompetitive restraints. Doctrinal and practical considerations weigh against allowing that protection to be traded against out-of-market benefits flowing to other groups. This proposition flows both ways; putting aside antitrust exemptions, it is similarly inconsistent with antitrust doctrine to permit firms to coordinate in ways that harm downstream purchasers, based on a purported justification that this purchaser harm is offset by the out-of-market benefits to the workers. We conclude that in all cases, multi-market balancing that treats out-market-benefits as cognizable justifications for the restraints on workers or other input suppliers should be rejected. However, since courts sometimes may not agree in limited circumstances such as two-sided platforms, we also briefly discuss how and in what circumstances such balancing might be undertaken. We apply this analysis to a series of real and hypothetical scenarios that raise paradigmatic issues involving these potential conflicting effects as they relate to workers. We also apply our analysis to a likely post-Alston case attacking the NCAA restraints on non-education payments to student-athletes, in light of the points made in Justice Kavanaugh’s concurrence in Alston.

Keywords: antitrust, anticompetition, workers protection

JEL Classification: K00, K21

Suggested Citation

Alexander, Laura M. and Salop, Steven C., Antitrust Worker Protections: The Rule of Reason Does Not Allow Counting of Out-of-Market Benefits (December 4, 2022). University of Chicago Law Review, Vol. 90, No. 2, 2023, Georgetown University Law Center Research Paper No. Forthcoming, (2023). Georgetown Law Faculty Publications and Other Works. 2447., Available at SSRN: https://ssrn.com/abstract=4094046 or http://dx.doi.org/10.2139/ssrn.4094046

Laura M. Alexander

Washington Center for Equitable Growth ( email )

Washington, DC
United States

Steven C. Salop (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States
202-662-9095 (Phone)
202-662-9497 (Fax)

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