Antitrust Lawyer Blog Commentary on Current Developments

FTC SETTLES WITH TALX CORP REGARDING ITS ACQUISITIONS OF UNEMPLOYMENT COMPENSATION MANAGEMENT AND EMPLOYMENT VERIFICATION SERVICE PROVIDERS

On April 28, 2008, the Federal Trade Commission (“FTC”) entered into a settlement agreement with TALX Corporation regarding its acquisitions of various unemployment compensation management (“UCM”) and verification of income and employment (“VOIE”) services. UCM consists of administering, on behalf of large, multi-state employers, unemployment compensation claims filed with a state or territory. VOIE consists of providing income and employment information on behalf of employers to third parties, such as lending institutions.
TALX was the largest provider of VOIE services in 2002. Later that year, it acquired the two largest UCM providers, James E. Frick Inc. and the Gates McDonald & Company. Between June 2003 and November 2005, TALX made a series of acquisitions of various UCM/VOIE services including Johnson & Associates, LLC, Sheakley-Uniservice, Inc., Employers Unity, Inc., TBT Enterprises, Inc. and its sister corporation, UI Advantage, Inc., Jon-Jay Associates, Inc.

The FTC alleges that while each transaction was not problematic, the “cumulative effect of the acquisitions” has in sum translated into the virtual acquisition of its competition. TALX’s acquisitions have allowed it to unilaterally increase its prices and decrease the quality of services in the relevant markets.

The settlement would foster market entry and expansion by current and future competitors. The Commission vote to accept the complaint and consent order was 4-0.

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com