Alleged "No-Poach" Agreement In Health Care Industry Results In Another Criminal Antitrust Prosecution

• Published date: 08 March 2022
• Subject Matter: Anti-trust/Competition Law, Food, Drugs, Healthcare, Life Sciences, Criminal Law, Compliance, Antitrust, EU Competition , Crime
• Law Firm: Seyfarth Shaw LLP
• Author: Mr Brandon Bigelow, Caleb J. Schillinger and Jessica S. Berk

The US Department of Justice (DOJ) recently announced the indictment by a grand jury charging four owners/managers of home health care agencies in Maine with participating in a conspiracy to suppress wages and restrict the job mobility of personal support specialist (PSS) workers in violation of Section 1 of the federal Sherman Act. According to the indictment, the owners/managers agreed to fix the rates paid to these workers and also agreed not to hire each other's workers. The DOJ warned in a press release that '[t]his indictment is the first in this ongoing investigation into wage fixing and worker allocation schemes in the PSS industry,' and part of a larger 'ongoing federal antitrust investigation into wage fixing and worker allocation in the home health care industry.'

Even before this latest indictment, the DOJ made clear its intention to prosecute unlawful collusion by employers in labor markets. The DOJ had warned in its Antitrust Guidance for Human Resource Professionals in 2016 that the antitrust laws apply to competition among firms to hire employees, and that the DOJ would bring criminal charges 'against naked wage-fixing or no-poaching agreements.' In December 2020, the DOJ filed criminal charges against the former owner of a therapist staffing company based on an alleged scheme to fix the wages paid to physical therapists and therapist assistants in the Dallas-Fort Worth area. The court in that case recently denied a motion to dismiss, finding that a horizontal agreement among buyers in the labor market to fix the price of labor is a form of price fixing and thus per se illegal. Since December 2020, the DOJ has brought criminal charges against other health care companies for entering into no-poach and/or wage fixing agreements.

Not all agreements concerning the hiring or solicitation of a competitor's employees are necessarily unlawful. In Aya Healthcare Servs., Inc. v. AMN Healthcare, Inc., 9 F.4th 1102 (9th Cir. Aug. 19, 2021), the Ninth Circuit drew a distinction between 'naked' and 'ancillary' restraints and clarified that non-solicitation provisions in business-to-business collaboration agreements are not per se violations of the Sherman...