US regulator will probe DEI through new labor task force

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(Reuters) – The U.S. Federal Trade Commission will look into potential corporate collusion on diversity, equity and inclusion targets as part of a new labor market task force, the agency said on Wednesday.

Since taking office in January, President Donald Trump has sought to eliminate DEI efforts from American life. Corporations have faced a conservative backlash over practices aimed at redressing lower hiring, retention, and pay rates for members of racial minorities and other underrepresented groups. The Trump administration claims such practices are illegal.

Some major U.S. employers have abandoned DEI policies since Trump’s election, including McDonald’s, Target and PepsiCo.

The FTC’s labor task force will look at “collusion or unlawful coordination on DEI metrics, which may have the effect of diminishing labor competition by excluding certain workers from markets, or students from professional training schools, on the basis of race, sex, or sexual orientation,” as part of its mandate, the FTC said.

The group will also examine a range of other practices that affect workers, including noncompete agreements, no-poach agreements, and fraud on franchisees. 

“Sadly, deceptive, unfair, and anticompetitive labor practices are widespread. They are as varied as they are unscrupulous. They affect workers in all types of industries,” FTC Chairman Andrew Ferguson said in a memo creating the task force.

The effort shows some continuity between Ferguson’s agenda and former Chair Lina Khan’s, though Ferguson disagreed with Khan’s bid to enact a broad noncompete ban.

(Reporting by Jody Godoy; Editing by Stephen Coates)