1

Analysis of Agreements Containing Consent Order to Aid Public Comment

In the Matter of O-I Glass, Inc and In the Matter of Ardagh Group S.A., Ardagh Glass Inc., 

and Ardagh Glass Packaging Inc., File No. 211 0182

I. Introduction

The Federal Trade Commission has accepted, subject to final approval, two consent 

agreements with, respectively, Ardagh Group S.A., Ardagh Glass Inc., and Ardagh Glass 

Packaging Inc. (collectively, “Ardagh”) and O-I Glass Inc. (“O-I”). Ardagh and O-I 

(collectively, “the Manufacturers”) each manufacture and sell in the United States glass 

containers used for food and beverage packaging and employ workers at multiple facilities 

within the United States for this purpose.

The consent agreements settle charges that the Manufacturers violated Section 5 of the 

Federal Trade Commission Act, 15 U.S.C. § 45, through their use of post-employment 

covenants not to compete (“Non-Compete Restrictions”). A Non-Compete Restriction is a term

that, after a worker has ceased working for an employer, restricts the worker’s freedom to accept 

employment with a competing business, to form a competing business, or otherwise to compete 

with the employer.

The complaints allege that each of these companies imposed Non-Compete Restrictions 

on employees across a variety of positions, including workers whose labor is an important input 

in the glass container manufacturing process. The complaints allege that this conduct has a 

tendency or likelihood to limit workers’ mobility, to impede rivals’ access to the restricted 

employees’ labor, and thus to harm workers, consumers, competition, and the competitive 

process. As such, the complaints allege that each company has engaged in an unfair method of 

competition in violation of Section 5 of the FTC Act. The proposed orders have been placed on 

the public record for 30 days in order to receive comments from interested persons. Comments 

received during this period will become part of the public record. After 30 days, the 

Commission will again review the consent agreements and the comments received and will 

decide whether it should withdraw from the consent agreements and take appropriate action or 

make the proposed orders final.

The purpose of this analysis is to facilitate public comment on the proposed orders. It is 

not intended to constitute an official interpretation of the complaints, the consent agreements, or 

the proposed orders, or to modify their terms in any way.

II. The Complaints

The complaints make the following allegations.
2

The glass containers that Ardagh and O-I manufacture and sell are purchased primarily 

by companies that sell food, beer, non-alcoholic beverages, and wine and spirits. The glass 

container industry in the United States is highly concentrated and is characterized by substantial 

barriers to entry and expansion. Among these barriers, it is difficult to identify and employ 

personnel with skills and experience in glass container manufacturing.

Each of the Manufacturers has imposed Non-Compete Restrictions on employees across 

a variety of positions. These restrictions typically required that, for either one or two years

following the conclusion of the worker’s employment with the Manufacturer, the worker may 

not be employed by a competing business in the United States. At the outset of the 

Commission’s investigation, over 700 employees of Ardagh and over 1,000 employees of O-I

were subject to such restrictions, including employees who work with the glass container plants’ 

furnaces and forming equipment and in other glass production, engineering, and quality 

assurance roles.

The complaints further allege that each company’s use of the challenged Non-Compete 

Restrictions has the tendency or likely effect of harming competition, consumers, and workers, 

including by: (i) impeding the entry and expansion of rivals in the glass container industry, (ii) 

reducing employee mobility, and (iii) causing lower wages and salaries, reduced benefits, less 

favorable working conditions, and personal hardship to employees. 

III. Legal Analysis

Section 5 of the FTC Act prohibits “unfair methods of competition.”1 Congress 

empowered the FTC to enforce Section 5’s prohibition on “unfair methods of competition” to 

ensure that the antitrust laws could adapt to changing circumstances and to address the full range 

of practices that may undermine competition and the competitive process.2 The Commission and 

federal courts have historically interpreted Section 5 to prohibit conduct that is inconsistent with

the policies or the spirit of the antitrust laws, even if that conduct would not violate the Sherman 

or Clayton Acts.3

1 15 U.S.C. § 45(a).

2 E.g., Atl. Refining Co. v. FTC, 381 U.S. 357, 367 (1965) (“The Congress intentionally left development of the term 

‘unfair’ to the Commission rather than attempting to define the many and variable unfair practices which prevail in 

commerce.”) (internal citations and quotation marks omitted); see also Fed. Trade Comm’n, Policy Statement 

Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act, 

Commission File No. P221202 (Nov. 10, 2022) [hereinafter “FTC Section 5 Policy Statement (2022)”], at 5 

(“Congress struck an intentional balance when it enacted the FTC Act. It allowed the Commission to proceed 

against a broader range of anticompetitive conduct than can be reached under the Clayton and Sherman Acts, but it 

did not establish a private right of action under Section 5, and it limited the preclusive effects of the FTC’s 

enforcement actions in private antitrust cases under the Sherman and Clayton Acts.”). 3 E.g., FTC v. Motion Picture Advert. Serv. Co., 344 U.S. 392, 394–95 (1953) (“The ‘Unfair methods of 

competition’, which are condemned by [Section] 5(a) of the [FTC] Act, are not confined to those that were illegal at 

common law or that were condemned by the Sherman Act. Congress advisedly left the concept flexible to be defined 
3

The Commission’s recent Section 5 Policy Statement describes the most significant 

general principles concerning whether conduct is an unfair method of competition.4 A person 

violates Section 5 by (1) engaging in a method of competition (2) that is unfair—i.e., conduct 

that “goes beyond competition on the merits.”5 A method of competition is “conduct undertaken 

by an actor in the marketplace” that implicates competition, whether directly or indirectly.6

Conduct is unfair if (a) it is “coercive, exploitative, collusive, abusive, deceptive, predatory,”

“involve[s] the use of economic power of a similar nature,” or is “otherwise restrictive and 

exclusionary,” and (b) “tend[s] to negatively affect competitive conditions” for “consumers, 

workers, or other market participants”—for example by impairing the opportunities of market 

participants, including potential entrants; interfering with the normal mechanisms of 

competition; limiting choice; reducing output; reducing innovation; or reducing competition 

between rivals.7 The two parts of this test for unfairness “are weighed according to a sliding 

scale”: where there is strong evidence for one part of the test, “less may be necessary” to satisfy 

the other part.8 In appropriate circumstances, conduct may be condemned under Section 5 

without defining a relevant market, proving market power, or showing harm through a rule of 

reason analysis.

9

In addition, the Commission may consider any asserted justifications for a particular 

practice.10 Any such inquiry would focus on “[t]he nature of the harm” caused by the method of 

competition: “the more facially unfair and injurious the harm, the less likely it is to be overcome 

by a countervailing justification of any kind.”11 Unlike “a net efficiencies test or a numerical 

cost-benefit analysis,” this analysis examines whether “purported benefits of the practice” 

redound to the benefit of other market participants rather than the respondent.12 Established 

limits on defenses and justifications under the Sherman Act “apply in the Section 5 context as 

well,” including that the justifications must be cognizable, non-pretextual, and narrowly 

with particularity by the myriad of cases from the field of business.”) (internal citations omitted); Fashion 

Originators’ Guild of Am. v. FTC, 312 U.S. 457, 463 (1941) (Commission may “suppress” conduct whose “purpose 

and practice . . . runs counter to the public policy declared in the Sherman and Clayton Acts”); FTC v. Brown Shoe, 

384 U.S. 316, 321 (1966) (Commission’s power reaches “practices which conflict with the basic policies of the 

Sherman and Clayton Acts even though such practices may not actually violate these laws”); E.I. du Pont de 

Nemours & Co. v. FTC (Ethyl), 729 F.2d 128, 136–37 (2d Cir. 1984) (Commission may bar “conduct which, 

although not a violation of the letter of the antitrust laws, is close to a violation or is contrary to their spirit”); see 

also FTC v. Ind. Fed’n of Dentists, 476 U.S. 447, 454 (1986); FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 244 

(1972); FTC v. R.F. Keppel & Bros., Inc., 291 U.S. 304, 309–10 (1934). 4 FTC Section 5 Policy Statement (2022), supra note 2. 5 Id. at 8–10. 6 Id. at 8. 7 Id. 8–10. 8 Id. at 9. 9 Id. at 10. 10 Id. at 10–12 (“There is limited caselaw on what, if any, justifications may be cognizable in a standalone Section 5 

unfair methods of competition case, and some courts have declined to consider justifications altogether.”). 11 Id. at 11. 12 Id.
4

tailored.13

As described below, the factual allegations in the complaints would support concluding 

that each Respondent’s use of the challenged Non-Compete Restrictions is an unfair method of 

competition under Section 5.

First, each Respondent’s use of Non-Compete Restrictions is a method of competition. 

The challenged Non-Compete Restrictions are not mere “condition[s] of the marketplace, not of 

the respondent’s making.”14 Rather, these are contract provisions that each Respondent required

its employees to enter into, which, by their terms, restricted the employment options available to 

affected workers and therefore implicated competition for labor.

Second, each Respondent’s use of the challenged Non-Compete Restrictions “goes 

beyond competition on the merits”15 because it is coercive, exploitative, exclusionary, and 

restrictive as these terms are used in the FTC Section 5 Policy Statement. Non-Compete 

Restrictions typically result from employers’ outsized bargaining power compared to that of 

employees. And, by reducing workers’ negotiating leverage vis-à-vis their current employers, 

Non-Compete Restrictions tend to impair workers’ ability to negotiate for better pay and 

working conditions.

16 The complaints here also allege that the challenged Non-Compete 

Restrictions had a tendency or likely effect of impeding the entry and expansion of rivals, as 

discussed below. As such, they are exclusionary in a manner that violates the spirit and policies 

of the Sherman Act.

17 Finally, while competition on the merits “may include, for example . . . 

attracting employees and workers through the offering of better employment terms,”18 Non13 Id. at 11–12. 14 See id. at 8. 15 See id. at 8. 16 See, e.g., Dep’t of the Treasury, Report, Non-compete Contracts: Economic Effects and Policy Implications (Mar.

2016) at 10, 

https://home.treasury.gov/system/files/226/Non_Compete_Contracts_Econimic_Effects_and_Policy_Implications_

MAR2016.pdf (“When workers are legally prevented from accepting competitors’ offers, those workers have less 

leverage in wage negotiations [with their current employer.]”). The strength of a worker’s negotiating position with 

their current employer is largely based on the suitability of their next-best alternative employer (i.e., the alternative 

employer that would offer the employee the best combination of wages and working conditions, net of any 

switching costs). Competing employers who fall within the scope of a Non-Compete Agreement, typically

employers in the same industry and geographic area—are often the strongest competitor to a worker’s current 

employer for that worker’s labor. Such employers typically place the highest value on the worker’s industry-specific 

skills, and workers generally face lower switching costs when moving to such employers. See, e.g., David J. Balan, 

Labor Non-Compete Agreements: Tool for Economic Efficiency, or Means to Extract Value from Workers? 15

(2021), https://equitablegrowth.org/working-papers/labor-non-compete-agreements-tool-for-economic-efficiency-ormeans-to-extract-value-from-workers/ (noting that workers often “are barred by the non-compete from [switching 

to] the[ir] best available alternative jobs”). 17 See generally, e.g., ZF Meritor v. Easton Corp., 696 F.3d 254, 278–79 (3d Cir. 2012); McWane, Inc. v. Fed. 

Trade Comm’n, 783 F.3d 814, 835 (11th Cir. 2005); Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 328 

(1961); Geneva Pharms. Tech. Corp. v. Barr Labs., 386 F.3d 485, 509 (2d Cir. 2004); see also FTC Section 5 Policy 

Statement (2022), at 8, 9, 12.

18 FTC Section 5 Policy Statement (2022), supra note 2, at 8–9.
5

Compete Restrictions, by contrast, create a legal impediment that restricts workers from leaving 

their employment even if they find more attractive employment terms elsewhere. For this 

reason, Non-Compete Restrictions have long been considered proper subjects for scrutiny under 

the nation’s antitrust laws.19

Third, the factual allegations in the complaints support a finding that each Respondent’s 

challenged conduct has the tendency or likely effect of negatively affecting competition in the 

U.S. glass container industry. Specifically, the complaints allege that (i) each of the Respondents 

required employees across a variety of positions, including salaried employees who work with 

the glass container plants’ furnace and forming equipment and in other glass production 

engineering, and quality assurance roles, to refrain from working for competing glass 

manufacturing companies for at least one year after the conclusion of their employment, (ii) the 

ability to identify and employ personnel with skill and experience in glass container 

manufacturing is a substantial barrier to entry and expansion, and (iii) the challenged restrictions

have a tendency or likely effect of impeding the entry and expansion of rivals. 

Fourth, the factual allegations in the complaints support a finding that each Respondent’s 

challenged conduct has the tendency or likely effect of negatively affecting competitive 

conditions affecting workers in the U.S. glass container industry. In well-functioning labor 

markets, workers compete to attract employers, and employers compete to attract workers. For 

example, workers may attract potential employers by offering different skills and experience 

levels. Employers may attract potential employees by offering higher wages, better hours, a 

more convenient job location, more autonomy, more benefits, or a different set of job 

responsibilities. Because factors beyond price (wages) are important to both workers and 

employers in the job context, labor markets are “matching markets” as opposed to “commodity 

markets.”20

In general, in matching markets, higher-quality matches tend to result when both sides—

here, workers and employers—have more options available to them.21 Having more options on 

both sides could, for example, allow for matching workers with jobs in which their specific 

skills are more valued, the hours demanded better fit their availability, or their commutes are 

shorter and more efficient. Matches could also be better in that various employers’ 

compensation packages, which differ in terms of pay and benefits, are coupled with employees 

19 See, e.g., U.S. v. Am. Tobacco Co., 221 U.S. 106 (1911); Newburger, Loeb & Co., Inc. v. Gross, 563 F.2d 1057, 

1082 (2d Cir. 1977); Bradford v. N.Y. Times Co., 501 F.2d 51 (2d Cir. 1974); Golden v. Kentile Floors, Inc., 512 

F.2d 838 (5th Cir. 1975); U.S. v. Empire Gas Corp., 537 F.2d 296 (8th Cir. 1976); Aydin Corp. v. Loral Corp., 718 

F.2d 897 (9th Cir. 1983); Consultants & Designers, Inc. v. Bulter Serv. Grp., Inc., 720 F.2d 1553 (11th Cir. 1983).

20 See generally David H. Autor, Wiring the Labor Market, 15 J. OF ECON. PERSPECTIVES 25–40 (2001); Enrico 

Moretti, Local Labor Markets, in 4b HANDBOOK OF LABOR ECONOMICS 1237–1313 (2011). 21 See, e.g., Dep’t of the Treasury, Report, The State of Labor Market Competition (Mar. 7, 2022) at 5–7, 

https://home.treasury.gov/system/files/136/State-of-Labor-Market-Competition-2022.pdf; Dep’t of the Treasury, 

Report, Non-compete Contracts: Economic Effects and Policy Implications, supra note 16, at 3–5, 22–23.
6

who value those offerings more and will, for example, tend to stay at those jobs longer as a 

result. Competition for labor allows for job mobility and benefits workers by allowing them to 

accept new employment, create or join new businesses, negotiate better terms in their current 

jobs, and generally pursue career advancement as they see fit.22

By preventing workers and employers from freely choosing their preferred jobs and 

candidates, respectively, Non-Compete Restrictions tend to impede and undermine competition 

in labor markets.23 Research suggests that Non-Compete Restrictions measurably reduce worker 

mobility,24 lower workers’ earnings,25 and increase racial and gender wage gaps.26 At the 

individual level, a Non-Compete Restriction can force a worker who wishes to leave a job into a 

difficult choice: stay in the current position despite being able to receive a better job elsewhere, 

take a position with a competitor at the risk of being found out and sued, or leave the industry 

entirely. In this way, Non-Compete Restrictions tend to leave workers with fewer and lowerquality competing job options,

27 thereby reducing workers’ bargaining leverage with their 

current employers and resulting in lower wages, slower wage growth, and less favorable 

working conditions.28

Here, the complaints allege that the challenged Non-Compete Restrictions have the 

tendency or likely effect of reducing employee mobility and causing lower wages and salaries, 

reduced benefits, less favorable working conditions, and personal hardship to employees.

Finally, as the complaints allege, any legitimate objectives of Respondents’ use of the 

challenged Non-Compete Restrictions could be achieved through significantly less restrictive 

means, including, for example, by entering confidentiality agreements that prohibit employees 

and former employees from disclosing company trade secrets and other confidential 

information. Indeed, each of the Respondents nullified the challenged Non-Compete 

Restrictions after learning of the Commission’s investigation, apparently without incurring any

22 See, e.g., Cynthia L. Estlund, Between Rights and Contract: Arbitration Agreements and Non-Compete Covenants 

As A Hybrid Form of Employment Law, 155 U. PA. L. REV. 379, 407 (2006). 23 See, e.g., Dep’t of the Treasury, Report, The State of Labor Market Competition, supra note 21, at 5–7. 24 Matthew S. Johnson, Kurt Lavetti, & Michael Lipsitz, The Labor Market Effects of Legal Restrictions on

Worker Mobility 2 (2020), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3455381; Evan Starr, J.J. Prescott, 

& Norm Bishara, The Behavioral Effects of (Unenforceable) Contracts, 36 J. L., ECON., & ORG. 633, 652 (2020); 

Evan Starr, Justin Frake, & Rajshree Agarwal, Mobility Constraint Externalities, 30 ORG. SCI. 961, 963–65, 977

(2019); Matt Marx, Deborah Strumsky, & Lee Fleming, Mobility, Skills, and the Michigan Non-Compete

Experiment, 55 MGMT. SCI. 875, 884 (2009). 25 Michael Lipsitz & Evan Starr, Low-Wage Workers and the Enforceability of Noncompete Agreements, 68 MGMT.

SCI. 143, 144 (2021); Johnson, Lavetti, & Lipsitz, supra note 24. 26 Johnson, Lavetti, & Lipsitz, supra note 24. 27 See, e.g., Jessica Jeffers, The Impact of Restricting Labor Mobility on Corporate Investment and Entrepreneurship

21–22 (Dec. 24, 2019), https://ssrn.com/abstract=3040393. 28 See, e.g., Johnson, Lavetti, & Lipsitz, supra note 24; David J. Balan, Labor Practices Can be an Antitrust 

Problem Even When Labor Markets are Competitive, CPI ANTITRUST CHRONICLE (May 2020) at 8.
7

notable impediment to their ability to achieve any legitimate business objectives.

IV. Proposed Orders

The proposed orders seek to remedy the Respondents’ unfair methods of competition.

Section II of each proposed order prohibits the Respondent from entering or attempting to enter, 

maintaining or attempting to maintain, or enforcing or attempting to enforce a Non-Compete 

Restriction with an Employee, or communicating to an Employee or a prospective or current 

employer of that Employee that the Employee is subject to a Non-Compete Restriction.

29

Paragraph IV.A requires the Respondent to take all steps necessary to void and nullify all 

existing Non-Compete Restrictions with Employees within 30 days after the date on which the 

proposed order is issued.30

The proposed orders also contain provisions designed to ensure compliance. Paragraph 

III.A of each proposed order requires the Respondent to provide written notice to Employees

that have or recently had a Non-Compete Restriction that (i) the restriction is null and void, and 

(ii) the Employees may, after they stop working for Respondent, seek or accept jobs with any 

other company or person, run their own businesses, and compete with the Respondent.31

Paragraph III.B requires Respondents to notify new Employees that they will not be subject to 

Non-Compete Restrictions by including a specified notice in the documentation provided to new 

Employees upon hire.32

Other paragraphs contain standard provisions regarding compliance reports, notice of 

changes in Respondents, and access for the FTC to documents and personnel.33 The proposed 

orders’ prohibitions apply only to Respondents’ Employees within the United States, and the 

term of each proposed order is twenty years.

34

29 See Decision & Order ¶ II. 30 Id. ¶ IV.A. 31 Id. ¶ III.A; App’x B. 32 Id. ¶ III.B. 33 Id. ¶¶ IV–VII. 34 Id. ¶ IX.