25706 Federal Register / Vol. 73, No. 89 / Wednesday, May 7, 2008 / Notices 

1 The comment must be accompanied by an 

explicit request for confidential treatment, 

including the factual and legal basis for the request, 

and must identify the specific portions of the 

comment to be withheld from the public record. 

The request will be granted or denied by the 

Commission’s General Counsel, consistent with 

applicable law and the public interest. See 

Commission Rule 4.9(c), 16 CFR 4.9(c). 

must be received not later than May 21, 

2008. 

A. Federal Reserve Bank of Dallas 

(W. Arthur Tribble, Vice President) 2200 

North Pearl Street, Dallas, Texas 75201- 

2272: 

1. The Haskell Bancshares, Inc., 

Employee Stock Ownership Plan, 

Haskell, Texas, Dan R. Griffith, Andrew 

Gannaway both of Haskell, Texas, 

Robert Howard, Abilene, Texas as 

Trustees; to retain ownership and 

control of Haskell Bancshares, Inc., 

Haskell, Texas, and thereby indirectly 

its subsidiary, Haskell National Bank, 

Haskell, Texas. 

Board of Governors of the Federal Reserve 

System, May 2, 2008. 

Robert deV. Frierson, 

Deputy Secretary of the Board. 

[FR Doc. E8–10057 Filed 5–6–08; 8:45 am] 

BILLING CODE 6210–01–S 

FEDERAL TRADE COMMISSION 

[File No. 061 0209] 

TALX, Inc.; Analysis of Proposed 

Consent Order to Aid Public Comment 

AGENCY: Federal Trade Commission. 

ACTION: Proposed Consent Agreement. 

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

federal law prohibiting unfair or 

deceptive acts or practices or unfair 

methods of competition. The attached 

Analysis to Aid Public Comment 

describes both the allegations in the 

draft complaint and the terms of the 

consent order — embodied in the 

consent agreement — that would settle 

these allegations. 

DATES: Comments must be received on 

or before May 28, 2008. 

ADDRESSES: Interested parties are 

invited to submit written comments. 

Comments should refer to ‘‘TALX, Inc., 

File No. 061 0209,’’ to facilitate the 

organization of comments. A comment 

filed in paper form should include this 

reference both in the text and on the 

envelope, and should be mailed or 

delivered to the following address: 

Federal Trade Commission/Office of the 

Secretary, Room 135-H, 600 

Pennsylvania Avenue, N.W., 

Washington, D.C. 20580. Comments 

containing confidential material must be 

filed in paper form, must be clearly 

labeled ‘‘Confidential,’’ and must 

comply with Commission Rule 4.9(c). 

16 CFR 4.9(c) (2005).1 The FTC is 

requesting that any comment filed in 

paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments that do not 

contain any nonpublic information may 

instead be filed in electronic form by 

following the instructions on the webbased form at http:// 

secure.commentworks.com/ftc-TALX. 

To ensure that the Commission 

considers an electronic comment, you 

must file it on that web-based form. 

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. All timely and responsive 

public comments, whether filed in 

paper or electronic form, will be 

considered by the Commission, and will 

be available to the public on the FTC 

website, to the extent practicable, at 

www.ftc.gov. As a matter of discretion, 

the FTC makes every effort to remove 

home contact information for 

individuals from the public comments it 

receives before placing those comments 

on the FTC website. More information, 

including routine uses permitted by the 

Privacy Act, may be found in the FTC’s 

privacy policy, at (http://www.ftc.gov/ 

ftc/privacy.shtm). 

FOR FURTHER INFORMATION CONTACT: 

Sean Hughto, FTC Bureau of 

Competition, 600 Pennsylvania Avenue, 

NW, Washington, D.C. 20580, (202) 326- 

2199. 

SUPPLEMENTARY INFORMATION: Pursuant 

to section 6(f) of the Federal Trade 

Commission Act, 38 Stat. 721, 15 U.S.C. 

46(f), and § 2.34 of the Commission 

Rules of Practice, 16 CFR 2.34, notice is 

hereby given that the above-captioned 

consent agreement containing a consent 

order to cease and desist, having been 

filed with and accepted, subject to final 

approval, by the Commission, has been 

placed on the public record for a period 

of thirty (30) days. The following 

Analysis to Aid Public Comment 

describes the terms of the consent 

agreement, and the allegations in the 

complaint. An electronic copy of the 

full text of the consent agreement 

package can be obtained from the FTC 

Home Page (for April 28 2008), on the 

World Wide Web, at (http:// 

www.ftc.gov/os/2008/04index.htm). A 

paper copy can be obtained from the 

FTC Public Reference Room, Room 130- 

H, 600 Pennsylvania Avenue, NW, 

Washington, D.C. 20580, either in 

person or by calling (202) 326-2222. 

Public comments are invited, and may 

be filed with the Commission in either 

paper or electronic form. All comments 

should be filed as prescribed in the 

ADDRESSES section above, and must be 

received on or before the date specified 

in the DATES section. 

Analysis of Agreement Containing 

Consent Order to Aid Public Comment 

I. Introduction 

The Federal Trade Commission 

(‘‘Commission’’) has accepted, subject to 

final approval, an Agreement 

Containing Consent Order 

(‘‘Agreement’’) from TALX Corporation 

(‘‘Proposed Respondent’’). The Consent 

Agreement settles allegations that TALX 

has violated Section 7 of the Clayton 

Act, as amended, 15 U.S.C. § 18, and 

Section 5 of the Federal Trade 

Commission Act, as amended, 15 U.S.C. 

§ 45, by substantially lessening 

competition in connection with the 

provision of outsourced UCM services 

and employer verification services 

nationwide through a series of 

consummated acquisitions. Pursuant to 

the Agreement, TALX has provisionally 

agreed to be bound by a proposed 

consent order (‘‘Proposed Consent 

Order’’). 

The Proposed Consent Order has been 

placed on the public record for thirty 

(30) days for reception of comments by 

interested persons. Comments received 

during this period will become part of 

the public record. After thirty (30) days, 

the Commission will again review the 

Agreement and the comments received 

and will decide whether it should 

withdraw from the Agreement or make 

final the Agreement’s Proposed Consent 

Order. 

The purpose of the Agreement is to 

remedy anticompetitive effects, alleged 

in the Commission’s Complaint in this 

matter, that will likely result from the 

acquisitions by Proposed Respondent of 

James E. Frick Inc., Johnson & 

Associates, L.L.C., and certain assets 

and businesses of Gates McDonald & 

Company, Sheakley-Uniservice, Inc., UI 

Advantage, Jon-Jay Associates, Inc., and 

Employers Unity, Inc. 

The Proposed Consent Order provides 

for relief in two markets where the 

Commission finds reason to believe that 

these acquisitions likely will have 

anticompetitive effects: the national 

market for outsourced unemployment 

compensation management (‘‘UCM’’) 

services, and the national market for 

outsourced employer verification 


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Federal Register / Vol. 73, No. 89 / Wednesday, May 7, 2008 / Notices 25707 

services, also known as the market for 

verification of income and employment 

(‘‘VOIE’’) services. 

The Proposed Consent Order is aimed 

at expediting the entry and expansion of 

competitors by, among other things, 

freeing past, as well as various current, 

TALX employees to take jobs with 

competitors and by granting the 

majority of TALX’s present long term 

contract customers the unilateral right 

to get out of those contracts and switch 

to another UCM provider. While the 

Commission usually typically prefers 

divestitures that immediately reset 

market shares (the sale of a plant in the 

manufacturing context, for example), 

unique circumstances combine in this 

matter to make it appropriate for the 

Commission to accept relief aimed at 

encouraging the movement of market 

share to competitors though selfselection by TALX’s customers, as 

opposed to mandating the transfer of 

arbitrary set of these service contracts. 

These circumstances include, but are 

not necessarily limited to, the personal 

service nature of the product, divergent 

customer preferences and needs, and 

the existence of several very small, but 

nevertheless viable, competitors. The 

proposed remedy seeks to ensure that 

the entry and expansion necessary to 

ensure a competitive market can occur 

much more quickly than it would absent 

relief. More specifically, the Proposed 

Consent Order requires TALX to (a) 

allow many of its customers with longterm UCM contracts to terminate those 

contracts at the customers’ option, (b) 

free many of its past and current 

employees from restrictions that would 

hamper their ability to be employed by 

UCM competitors, (c) provide, if 

requested, to certain former UCM 

customers of TALX, certain information 

related to UCM claims work retained by 

TALX, (d) give notice to certain 

customers of their right to cancel UCM 

contracts that are automatically renewed 

if not cancelled, and (e) not prevent or 

discourage any entity from supplying 

goods or services to a UCM competitor 

of TALX. 

The Order also requires TALX to give 

to the Commission prior notice of future 

acquisitions in markets for UCM 

services and VOIE services. 

II. The Respondent 

TALX is a Missouri corporation that, 

in May 2007, became a wholly-owned 

subsidiary of Equifax, Inc. TALX’s 

primary businesses are the provision of 

UCM services under the name ‘‘UC 

eXpress,’’ and the provision of VOIE 

services under the name ‘‘The Work 

Number.’’

III. The Complaint 

As alleged in the Commission’s 

Complaint, TALX competes in markets 

for UCM services and VOIE services. 

UCM services consist, in part, of the 

managing, administering, and/or 

processing, on behalf of an employer, of 

unemployment compensation claims 

filed with a state or territory. VOIE 

services consist, in part, of the provision 

of employment and income verifications 

including, but not limited to, the 

collection, maintenance, or 

dissemination of information 

concerning the employment status and 

income of those employees. In order to 

provide such VOIE services, a VOIE 

provider must collect and maintain 

payroll data and other data relating to 

employment. 

The Complaint alleges that the March 

2002 acquisitions by TALX of James E. 

Frick, Inc. and of the UCM services 

division of Gates McDonald eliminated 

competition between the two acquired 

companies in the national market for 

UCM services. James E. Frick, Inc. and 

Gates McDonald were the two largest 

providers of UCM services prior to 

TALX’s acquisition of both companies 

the same day. The Complaint also 

alleges that TALX’s acquisitions of 

Johnson and Associates, L.L.C., the 

UCM assets of Sheakley-Uniservice, 

Inc., Jon-Jay Associates, and the 

unemployment tax management 

business, which includes UCM services, 

of Employers Unity, Inc. substantially 

reduced competition in the national 

market for UCM services. 

The Complaint further alleges that 

TALX substantially reduced 

competition in the nationwide provision 

of VOIE services through the 

acquisitions of James E. Frick, Inc., and 

the VOIE businesses of SheakleyUniservice, Inc. and Employers Unity, 

Inc. 

The Complaint notes that some firms, 

known as ‘‘alliance partners,’’ outsource 

to TALX some of the UCM services they 

sell to others. The largest amount of 

such outsourcing is done by ADP, Inc. 

The Complaint alleges that each of the 

relevant markets is highly concentrated, 

and the consummated acquisitions 

increased concentration substantially, 

whether concentration is measured by 

the Herfindahl-Hirschman Index 

(‘‘HHI’’), or the number of competitively 

significant firms remaining in the 

market. 

The Complaint further alleges that 

entry would not be timely, likely, or 

sufficient to prevent anticompetitive 

effects in either of the relevant markets. 

As alleged in the Complaint, entry into 

the market for the provision of 

outsourced UCM services to large multistate employers is difficult and slow. 

According to the Complaint, among the 

factors that make entry into this market 

difficult and slow are the length of time 

it normally takes to make a sale, the 

maturity of the market, and the lengthy 

period necessary to establish a track 

record for successfully managing large 

volumes of unemployment 

compensation claims. The Complaint 

also alleges that entry and expansion in 

the provision of outsourced UCM 

services to large multi-state employers is 

made more difficult by the large number 

of customers that are tied to long-term 

contracts with terms as long as fiveyears. Prior to TALX’s acquisition of its 

leading competitors who can serve large 

employers with multi-state claims, the 

vast majority of industry contracts were 

renewable one year relationships. In 

recent years, TALX has successfully and 

vigorously pursued three and five year 

deals with its clients. The prevalence of 

long-term contracts and non-compete 

and non-solicitation agreements 

between TALX and its employees, 

which substantially reduce the number 

of experienced and talented employees 

available to be hired by TALX’s 

competitors and potential competitors, 

has made entry and expansion more 

difficult and slow. 

The Complaint also alleges that entry 

into the market for VOIE services is 

difficult and slow. Among the factors 

that make entry into this market 

difficult and slow are, according to the 

Complaint, the need to acquire a 

sufficient scale and scope of payroll and 

employment data to attract and service 

a sufficient customer base, the difficulty 

of developing software to automate the 

VOIE process, and the need to build a 

reputation for reliability and security. 

The Complaint alleges that the 

consummated acquisitions eliminated 

competition between TALX, and each of 

its competitors in the provision of 

outsourced UCM services and employer 

verification services nationwide. The 

Complaint further alleges that the 

consummated acquisitions enhance 

opportunities for TALX to increase 

prices unilaterally and to decrease the 

quality of services provided in each of 

the relevant markets. The acquisitions 

by TALX eliminated the closest 

competitors able to serve large 

employers with claims in many states or 

nationwide. 

The Complaint alleges that the 

consummated acquisitions violate 

Section 7 of the Clayton Act, as 

amended, 15 U.S.C. § 18, and Section 5 

of the Federal Trade Commission Act, as 

amended, 15 U.S.C. § 45, by 

substantially lessening competition in 


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25708 Federal Register / Vol. 73, No. 89 / Wednesday, May 7, 2008 / Notices 

connection with the provision of 

outsourced UCM services and employer 

verification services nationwide. The 

Complaint further alleges that the 

Acquisitions described have eliminated 

direct and actual competition in the 

provision of both UCM and employer 

verification services. The acquisitions 

by TALX of its competitors have 

enhanced its ability to increase prices 

unilaterally and enhanced its ability to 

decrease the quality of services 

provided in each of the relevant lines of 

commerce, according to the 

Commission’s Complaint. 

IV. The Proposed Consent Order 

As noted above, the Proposed Consent 

Order provides for relief in markets for 

UCM services and VOIE services. 

Paragraph II. of the Proposed Consent 

Order prohibits TALX from enforcing 

against certain current and former 

employees who accept employment 

with certain UCM competitors of TALX 

certain types of covenants not to 

compete, not to solicit, and not to 

disclose trade secrets. Paragraph I.P.1. of 

the Proposed Consent Order lists some 

of those UCM competitors by name, and 

Paragraph I.P.2. lists criteria for 

identifying other such UCM 

competitors. Paragraphs I.DD., I.FF., and 

I.TT. of the Propose Consent Order 

describe the types of restrictions on 

competition, solicitation, and trade 

secret disclosure that TALX would not 

be able to enforce in situations where 

Paragraph II. of the Proposed Consent 

Order is applicable. 

Paragraph II. of the Proposed Consent 

Order divides the past and current 

employees subject to this paragraph into 

three categories: ‘‘Relevant Current 

Persons,’’ ‘‘Relevant Past Persons,’’ and 

‘‘Other Relevant Current Persons.’’

Appendix F to the Proposed Consent 

Order lists all of such Relevant Current 

Persons and divides them into five 

categories: Customer Relationship 

Managers, Account Managers, 

Unemployment Insurance Consultants, 

Hearing Representatives, and Tax 

Consultants. The third proviso to 

Paragraph II. of the Proposed Consent 

Order limits the number of Relevant 

Current Persons that are subject to 

Paragraph II. of the Proposed Consent 

Order to ten Customer Relationship 

Managers, four Account Managers, 

twenty-three Unemployment Insurance 

Consultants, five Hearing 

Representatives, and four Tax 

Consultants. In addition, the 

applicability of Paragraph II. of the 

Proposed Consent Order to a Relevant 

Current Person will end two years after 

such person’s receipt of the notice that 

TALX is required to send such person 

pursuant to Paragraph VI.A. of the 

Proposed Consent Order. 

The other two categories of past and 

current employees, ‘‘Relevant Past 

Persons,’’ and ‘‘Other Relevant Current 

Persons,’’ are defined in Paragraphs 

I.HH. and I.MM. of the Proposed 

Consent Order. There is no limit on the 

number of Relevant Past Persons and 

Other Relevant Current Persons who are 

subject to Paragraph II. of the Proposed 

Consent Order; and that paragraph will 

apply to those persons for the full tenyear term of the Proposed Consent 

Order. 

Paragraph III. of the Proposed Consent 

Order provides that TALX must allow 

certain customers with contracts for 

UCM services with a term longer than 

one year to terminate their contracts on 

90 days notice if those customers 

outsource their UCM services to a 

competitor of TALX. Paragraph I.X. of 

the Proposed Consent Order specifies 

the customers covered by Paragraph III. 

of the Proposed Consent Order. The 

third proviso to Paragraph III. places an 

upper limit of $10 million on the ‘‘Total 

Of Relevant Values Of Terminated Long 

Term Contracts,’’ within the meaning of 

Paragraph I.XX. of the Proposed Consent 

Order. In addition, the applicability of 

Paragraph III. of the Proposed Consent 

Order to a customer will end three years 

after such customer’s receipt of the 

notice that TALX is required to send 

such customer pursuant to Paragraph 

VI.B. of the Proposed Consent Order. 

Paragraph IV. of the Proposed Consent 

Order provides, that at the request of a 

‘‘Former UCM Customer,’’ within the 

meaning of Paragraph I.TT of the 

Proposed Consent Order. TALX must 

transfer certain specified customer file 

information to such customer. The 

information to be transferred would 

include data relating to open 

unemployment compensation claims 

and to state unemployment tax rates, 

and include documents generated in 

preparation for unemployment 

compensation hearings and appeals. 

Paragraph V. of the Proposed Consent 

Order prevents TALX from entering into 

agreements that would prevent or 

discourage any entity from supplying 

goods or services to a UCM competitor 

of TALX. This paragraph does not apply 

to employment agreements. 

Paragraphs VI.A., VI..B., and VI.C. of 

the Proposed Consent Order require 

TALX to give notice to certain current 

and former employees and to certain 

long-term contract customers of their 

rights under Paragraphs II. and III. of the 

Order. 

Paragraph VI.D. of the Proposed 

Consent Order requires that TALX 

notify certain customers of their right to 

cancel UCM contracts that would 

otherwise be renewed automatically. 

Paragraph VI.E. of the Proposed 

Consent Order requires the posting on 

Web sites of specified information 

concerning the rights of certain current 

and former employees of TALX and of 

certain UCM customers of TALX under 

Paragraphs II. and III. of the Order, 

Paragraph VII.A. of the Proposed 

Consent Order prohibits TALX from 

entering into, or attempting to enter 

into, agreements to divide or allocate 

markets for UCM services. 

Paragraph VII.B. of the Proposed 

Consent Order prohibits TALX from 

entering into, or attempting to enter 

into, any agreement requiring ADP, Inc. 

to subcontract to TALX the rendering of 

UCM services to a customer if such 

agreement precedes, rather than follows, 

ADP, Inc.’s agreement with such 

customer to provide UCM services. The 

purpose of Paragraph VII.B. is to 

increase the ability of TALX’s current 

and future competitors to compete 

against TALX for the business of 

providing UCM services to customers of 

ADP. 

Paragraph VIII. of the Proposed 

Consent Order requires that, for ten (10) 

years, TALX give the Commission thirty 

(30) days advance notice before 

acquiring, or entering into a 

management contract with, a provider of 

UCM services or VOIE services. 

Paragraph IX. of the Proposed Consent 

Order appoints Erwin O. Switzer to the 

position of Monitor/Administrator. The 

Monitor/Administrator will assist the 

Commission in monitoring TALX’s 

compliance with the Proposed Consent 

Order, and will assist certain past and 

present employees of TALX and certain 

customers of TALX in exercising their 

rights under Paragraphs II. and III. of the 

Order. 

Paragraphs X., XI. and XII. of the 

Proposed Consent Order require TALX 

to comply with certain reporting 

requirements to the Commission. 

Paragraph XIII. provides that the 

Proposed Consent Order will terminate 

ten years after it goes into effect. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. E8–10027 Filed 5–6–08: 8:45 am] 

BILLING CODE 6750–01–S 


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