Recent DOJ Indictment with Criminal Wage Fixing and No-Poach Agreement

The Department of Justice’s Antitrust Division (DOJ) has once again indicted healthcare individuals and a healthcare company for violations of Section 1 of the Sherman Act.  On March 30, 2021, the DOJ indicted a Regional Manager (United States v. Hee et al., Case No. 2:21-cr-00098-RFB-BNW (D. Nev.)), who was responsible for managing the office’s hiring of nurses and developing new customers that needed nurse staffing services in Nevada, Arizona, and Utah, as well as competing companies.

Pharma companies, as well as healthcare companies, should be aware of this indictment because the DOJ continues to pursue Wage Fixing and No-Poaching Agreement cases in the healthcare area. See, e.g., United States v. Surgical Care Affiliates, USA v. Surgical Care Affiliates LLC et al., Case No. 3:21-cr-00011-L (N.D. Tex.). In Hee, the DOJ has alleged that agreements were entered into for the provision of healthcare staffing services that allocated nurses and fixed the wages of those nurses. According to the indictment, the co-conspirators agreed not to hire each other’s nurses through conversations and other communications. The conversations included agreements to refuse further wage increases and agreements not to recruit or hire co-conspirator’s nurses.

This indictment was the third criminal prosecution brought by the Antitrust Division in the healthcare market that involved the labor market. The Surgical Care Associates matter involves allegations of an agreement not to poach senior-level employees of two competitors.

The increase in labor collusion cases is a recent development by the DOJ. Jeffrey S. Jacobovitz is the chair of Arnall Golden Gregory’s Antitrust and Competition Group and is a former Federal Trade Commission Attorney. If your company is concerned regarding issues related to these recent developments, feel free to contact Jeffrey at 202-677-4056.