11/2/22: U.S. DOJ Secures Its First Criminal Labor Conviction for Health Care Companies’ Allocation & Wage-Fixing Conspiracy Targeting School Nurses
November 2, 2022
In 2016, the U.S. Department of Justice and the Federal Trade Commission announced that companies engaging in illegal wage-fixing and “no poach” agreements would begin facing criminal, not just civil, liability for their conduct. Last week, marking the DOJ’s Antitrust Division’s first criminal conviction since the 2016 announcement, a Nevada health care staffing company (VDA) pleaded guilty to engaging in a criminal allocation and wage-fixing conspiracy targeting school nurses.
According to the plea agreement, VDA and another health care staffing company servicing Nevada’s Clark County School District entered into a nine-month agreement not to hire nurses from one another, as well as to fix the nurses’ wages. While VDA states that its conduct involved a single telephone conversation and one email between a VDA employee and a competitor’s employee, this was sufficient for the Antitrust Division to charge both VDA and its then regional manager for criminal restraint of trade under § 1 of the Sherman Act.
The court sentenced VDA to pay a fine of $62,000 and restitution to the affected workers of $72,000, totaling $134,000. The fine was calculated by examining VDA’s trade volume and payroll records for wages paid to the nurses during the nine-month conspiracy period. The DOJ case is still pending against VDA’s former regional manager, who has pleaded not guilty and is set to appear for trial in April 2023.
This case serves as the most recent example of the federal government’s action toward companies’ restraint of trade, particularly within the health care industry. Accordingly, employers should remember that they may violate antitrust laws if they agree to set prices with competitors for labor and/or agree to refrain from hiring a competitor’s employees.
For questions related to antitrust law in employment, non-competition agreements, or non-solicitation agreements, contact the Barran Liebman team at 503-228-0500.
