FTC Takes Aim at No-Hire Agreements Locking Building Workers in Place

Key Takeaways

• FTC Enforcement Action: The FTC ordered Adamas Amenity Services LLC to stop enforcing no-hire agreements that restricted worker mobility across New Jersey and New York City.
• Worker Harm Alleged: Regulators said the agreements limited low-wage building services workers’ ability to negotiate higher pay, benefits, and working conditions.
• Market Competition Impact: The FTC found the clauses discouraged building owners from switching contractors and reduced competitive pressure in the building services market.
• Immediate Compliance Required: Adamas must cease enforcing existing no-hire agreements and notify customers and employees that the restrictions are void.

Deep Dive

The Federal Trade Commission moved again this week to dismantle labor practices it says quietly box workers into lower pay and fewer options, ordering Adamas Amenity Services to stop enforcing no-hire agreements that regulators say restricted job mobility across New Jersey and New York City.

According to the FTC’s complaint, Adamas required building owners and property managers to agree not to hire Adamas workers directly unless they paid steep penalties. In practice, the agency said, that meant janitorial staff, front desk workers, security personnel, and other building services employees (many of them low-wage workers) were effectively locked out of better-paying opportunities in the very buildings where they already worked.

The proposed consent order requires Adamas to immediately cease enforcing all existing no-hire agreements.

“American workers have a right to pursue job opportunities that offer them higher pay and better benefits,” said Daniel Guarnera, director of the FTC’s Bureau of Competition. He said the agency would continue to take enforcement action against labor practices that suppress wages and limit opportunity.

The case fits squarely within the FTC’s broader labor enforcement agenda under Chairman Andrew N. Ferguson, who has made competition in labor markets a priority. Over the past year, the agency has moved against a range of restrictive employment practices, including an action against Gateway Services that halted the enforcement of nearly 1,800 noncompete agreements, alongside a public call for tips on anticompetitive noncompetes and the launch of a cross-agency Joint Labor Task Force.

In the Adamas matter, the FTC and New Jersey Attorney General’s Office allege the impact went beyond individual workers. The no-hire clauses also prevented building owners from retaining staff when switching service providers, because employees could not simply stay on under a new contractor. In some cases, workers were forced to leave jobs altogether when management changed, even if the building itself remained the same.

The agency also argued that the agreements distorted competition among building service providers. Property owners, wary of losing long-serving staff, were less likely to seek bids from competitors. That dynamic, the FTC said, reduced incentives for rival firms to invest, expand services, or improve quality, ultimately narrowing choices for customers as well as workers.

Under the proposed order, Adamas must notify customers from the past three years that any no-hire provisions are void and must clearly inform employees that they are free to seek or accept jobs directly with building owners or with any company that takes over a building’s services.

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