FTC Orders Guardian Service Industries to Stop Enforcing Alleged No-Hire Agreements

The Federal Trade Commission (FTC) filed a complaint alleging that building services contractor Guardian Service Industries enforces a no-hire agreement and ordering it to stop doing so.

In its complaint, the regulator alleges that Guardian includes no-hire agreements in its customer service agreements with residential building owners, prohibiting them and Guardian’s competitors from hiring Guardian’s employees, the FTC said in a Wednesday (Dec. 4) press release.

“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,” Henry Liu, director of the FTC’s Bureau of Competition, said in the release. “Today’s action restores competition by creating a level playing field for employers in the building services industry.”

Guardian Service Industries did not immediately reply to PYMNTS’ request for comment.

Under the FTC’s proposed consent order, the company must stop enforcing a no-hire agreement, provide its customers and employees with a copy of the FTC’s order showing that the no-hire agreement is no longer in effect, and notify new employees that their employment is not subject to a no-hire agreement, according to the release.

Guardian Service Industries must also void and nullify all existing no-hire agreements, notify FTC staff in writing that it has done so, and not require anyone who is party to an existing no-hire agreement to pay any fees or penalties related to such an agreement, per the release.

“The FTC will continue to investigate business practices that restrict accessible opportunities for workers,” Liu said in the release.

The FTC released a proposal banning existing and future noncompete clauses in January 2023, with supporters of the move saying eliminating the agreements will boost employee earnings and spur innovation and entrepreneurship.

The regulator said at the time that about one in five workers — 30 million Americans — are bound by a noncompete agreement.

In August, a federal judge in Texas issued a ruling preventing the FTC’s new rule banning noncompete agreements from taking effect.

The decision called into question the FTC’s authority to enforce such broad restrictions on business practices, PYMNTS reported at the time.