Two Building Contractors, One Contract Clause: How No-Hire Deals Trapped Low-Wage Workers

Two building services contractors, Planned Building Services and its affiliates, and Guardian Service Industries, Inc., agreed in separate settlements to stop enforcing no-hire agreements that had restricted building owners from directly hiring workers employed by either company.DOCUMENTED

The two cases were announced together but resolved along different voting lines: commissioners approved the Planned Building Services complaint and settlement unanimously, while the Guardian matter split 3-2 along partisan lines, with two commissioners dissenting over whether the evidence supported the underlying antitrust theory.DOCUMENTED

Two companies, a nearly identical structure

According to the complaints, both companies included no-hire agreements in their customer service contracts with residential building owners, restricting those owners — and any competing building service contractor — from hiring the companies' employees, including after the underlying service contract had ended.DOCUMENTED For Guardian's roughly New York- and New Jersey-based workforce of concierge personnel, custodians, and maintenance technicians, the agreements limited their ability to negotiate for higher wages, better benefits, and improved working conditions.DOCUMENTED

"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," said Henry Liu, then-director of the Bureau of Competition, in announcing the Guardian settlement.DOCUMENTED

A partisan split over the evidence

Unlike the unanimous vote to pursue Planned Building Services, the Guardian complaint and settlement drew dissenting statements from the two Republican-appointed commissioners on the panel at the time. Both argued the agency had not presented sufficient evidence that Guardian's specific use of no-hire agreements was actually anticompetitive in its effects, as opposed to simply being present in the company's contracts.REVIEWED One dissenting commissioner wrote that he was "at a loss about how my colleagues have formed their reason to believe that Guardian is violating the antitrust laws."REVIEWED

The majority commissioners, by contrast, argued that no-hire agreements restraining low-wage workers' mobility fall squarely within the antitrust laws' traditional protection of competition in labor markets, not just output markets — reflecting a view that suppressing wage competition for workers is as much an antitrust concern as suppressing price competition for consumers.DOCUMENTED

What the settlements require

Both final orders require the companies to cease and desist from directly or indirectly enforcing any no-hire agreement, and from communicating to any prospective or current customer that an employee remains subject to such a restriction.DOCUMENTED The companies must notify customers who were subject to a no-hire agreement within the past several years that the restriction is void, and must refrain from including similar terms in any future customer contracts.DOCUMENTED

One dissenting commissioner said he was "at a loss" as to how his colleagues concluded Guardian's agreements were anticompetitive — even as the majority approved the same underlying legal theory unanimously in the companion Planned Building Services case.

Workers organizing around the issue

Advocacy around the Guardian case specifically credited mobilization by building service workers and their union, 32BJ SEIU, with helping to surface the existence and scope of no-hire agreements that had previously operated largely out of public view.REVIEWED Because such agreements are typically embedded in business-to-business service contracts rather than in any document an individual worker signs directly, workers subject to them frequently had no way of knowing the restriction existed until they attempted to change jobs and discovered a former employer had legal leverage to block the move.REVIEWED

Setting a template for later cases

Together with the subsequent action against Adamas Amenity Services, the Planned Building Services and Guardian settlements established a template that regulators have since applied repeatedly across the building services industry: cease-and-desist orders paired with mandatory customer notification and multi-year compliance monitoring, rather than a monetary penalty alone.REVIEWED That structural remedy directly addresses the mechanism causing the harm — the contract clause itself — rather than simply extracting a fine from companies that could, without a structural fix, continue including similar restrictions in future agreements.REVIEWED

Why the partisan divide over Guardian mattered

The dissenting commissioners' concern in the Guardian matter was not that no-hire agreements are always lawful, but that the specific evidentiary record in that case had not, in their view, clearly established anticompetitive effect beyond the mere existence of the contractual term.REVIEWED That distinction — between whether an agreement type is categorically unlawful versus whether a specific instance of it has been shown to actually harm competition — has continued to shape how the agency approaches labor-market cases since, with officials signaling a preference for building a stronger factual record of anticompetitive effect in future matters rather than relying primarily on the existence of a no-hire clause itself.REVIEWED The Adamas case, brought under the new leadership roughly a year later, similarly proceeded on a unanimous vote, suggesting the stronger evidentiary approach may have addressed at least some of the earlier dissenters' concerns.REVIEWED

Both Guardian and Planned Building Services operate extensively across the New York metropolitan area, meaning the combined reach of the two settlements affects a substantial share of the region's unionized and non-unionized building service workforce alike — a workforce that, according to worker advocates, had little visibility into these restrictions until union organizing and subsequent regulatory investigation brought the practice into public view.REVIEWED Both settlements remain in effect for multi-year terms, giving regulators an ongoing window to verify continued compliance and giving affected workers a documented right to invoke if a no-hire restriction is ever raised against them again.REVIEWED

Workers at either company who are unsure whether a no-hire restriction still affects their ability to change jobs can request written confirmation from their employer or the building owner, since both final orders require that confirmation be provided upon request as part of the settlement's ongoing compliance terms.REVIEWED

Have documents relevant to this story? Reach us through our tips channel.