In brief
On July 9, 2021, President Joe Biden issued an executive order (EO) announcing his administration’s commitment to increased antitrust enforcement. On the one-year anniversary of the EO, a recent flurry of enforcement efforts indicates that the Department of Justice (DOJ) remains vigilant in carrying out the EO’s initiatives, particularly in labor markets.
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In 2016, the DOJ’s Antitrust Division and the Federal Trade Commission (FTC) issued guidance indicating that anticompetitive conduct in labor markets could violate antitrust laws. Read also : Implementation of the Uyghur Forced Labor Prevention Act – United States Department of State. That guidance warned that agreements between competing employers to fix employee compensation or not to steal each other’s employees can be subject to criminal prosecution.
More recently, the EO called on federal agencies to examine anticompetitive conduct and pursue more aggressive enforcement. The EO promoted a “whole-of-government approach” to competition policy by encouraging agencies to protect competition by using their statutory authority.
A healthcare staffing firm and its former regional manager are nearing a settlement on charges of conspiring with a competing staffing firm to suppress the wages of Las Vegas school nurses.
On March 30, 2021, a federal grand jury filed an indictment in the United States District Court for the District of Nevada charging the company and the manager with engaging in a conspiracy to assign nurse employees and fix their wages in violation of the Sherman Act. Specifically, the indictment accuses the manager of agreeing with a co-conspirator not to hire or hire staff nurses from each other’s companies at Clark County School District facilities and not to increase their wages nurses
In his dismissal motion, the manager accused the DOJ of judicial misconduct, arguing that an FBI agent improperly interviewed him without a lawyer present and without informing him that an investigation was underway active criminal and that three DOJ lawyers were listening to the interview through reality. live audio time.1 The manager contended that these violations of his constitutional rights required dismissal of the indictment or suppression of the illegally obtained interview statements. The company also filed a motion to dismiss, arguing that there is no precedent or legal basis for treating the alleged agreement as a per se violation under the Sherman Act.2
During a May 12, 2022 status conference, the court preliminarily stated that the company’s motion to dismiss would be denied and also scheduled an evidentiary hearing for June 29, 2022 on the company’s motion to suppress. manager A few days before the scheduled hearing, the parties requested a continuance of the hearing, explaining that they had reached a preliminary resolution and needed additional time to finalize the agreement3.
The potential settlement would mark the DOJ’s first successful criminal prosecution for labor market competition violations following back-to-back acquittals earlier this year. On April 14, 2022, a jury acquitted the former owner and former clinical director of a therapist staffing company of conspiring to fix the compensation of physical therapy professionals. The jury convicted the owner only of obstructing a related FTC investigation. The next day, a jury acquitted a dialysis company and its former CEO of conspiring to suppress competition for employees.4 Following those acquittals, an alleged co-conspirator in a related indictment filed a notice of additional authority—namely, acquittals—supporting its pending motion to dismiss the criminal antitrust charges against it.5 However, these setbacks have not deterred the DOJ, as evidenced by the upcoming resolution of the health care staff prosecution .
On July 25, 2022, the DOJ announced a civil settlement with a data consulting firm, its president, and three poultry processors to end a conspiracy to exchange information about worker wages and benefits of poultry processing plants and to assist in workers’ compensation decisions in violation of the Sherman Act.
In a complaint and proposed consent decree filed in the U.S. District Court for the District of Maryland, the DOJ set forth a number of settlement terms, including requiring poultry processors to pay 84, $8 million in compensation for workers harmed by the information. exchange conspiracy. The proposed consent decree would prohibit poultry processors from sharing competitively sensitive information about the compensation of workers at poultry processing plants.
The proposed consent decree would also impose a court-appointed antitrust compliance monitor who will ensure poultry processors comply with the terms of the settlement for the next ten years. The compliance monitor would have broad authority to ensure poultry processors’ compliance with federal antitrust laws with respect to the companies’ poultry processing facilities, plant workers, chicken producers and other areas of their businesses. The Compliance Monitor would submit periodic reports on poultry processors’ antitrust compliance. The requirement for a compliance monitor in the poultry agreement is consistent with recent remarks by the Deputy Attorney General and the Deputy Attorney General of the Criminal Division, which make it clear that DOJ will increasingly impose compliance monitors to ensure that companies meet their compliance obligations.
Notably, on the same day the DOJ announced the aviram settlement, New York Attorney General Letitia James announced a settlement with two title insurance companies to end a non-poaching conspiracy, which required the companies to pay $1.25 million and cooperate with the ongoing investigation. . This settlement demonstrates that protecting competitive labor markets is a priority not only for the DOJ, but also for state antitrust enforcement agents.
On July 26, 2022, the DOJ and the National Labor Relations Board (NLRB) signed a memorandum of understanding (MOU) to strengthen their partnership to protect competitive labor markets and promote workers’ rights under the law labor The DOJ-NLRB MOU encourages greater coordination and information sharing between the two agencies to maximize enforcement of labor laws under the jurisdiction of the NLRB and antitrust laws enforced by the DOJ.
A week before the MOU between the DOJ and the NLRB, the FTC announced that it was joining the NLRB in a similar MOU to protect workers against anticompetitive practices. The FTC-NLRB MOU outlines how the FTC and NLRB will work together to address issues such as labor market concentration, labor evolution in the “gig economy,” and unilateral and restrictive contract provisions, including non-competition and non-disclosure. Building on the EO’s whole-of-government approach, these MOUs demonstrate a commitment among federal agencies to proactively work together to attack labor competition issues.
The recent flurry of enforcement efforts underscores the DOJ’s continued focus on protecting competition in labor markets. Indeed, the potential settlement of the health care workers’ prosecution, along with the DOJ’s recent settlement and poultry partnership with the NLRB, underscore that the DOJ is maintaining its momentum in its campaign against antitrust violations in the labor markets. In light of these enforcement efforts, companies should review and invest in improving their compliance programs to ensure that they adequately monitor and remediate anticompetitive conduct affecting labor markets.
1 Defendant Ryan Hee’s Motion to Dismiss or in the Alternative Motion to Suppress at 4, USA v. Hee et al., no. 21-CR-00098 (D. Nev. September 3, 2021), ECF. No. 38.2 Defendant’s Motion to Dismiss VDA OC at 5, USA v. Hee et al., no. 21-CR-00098 (D. Nev. September 3, 2021), ECF. No. 37.3 Order Granting Stipulation to Continue Evidentiary Hearing, USA v. Hee et al., no. 21-CR-00098 (D. Nev. June 24, 2022), ECF. No. 93. The court granted this request and rescheduled the hearing for August 10, 2022. Id.4 Jury Verdict, USA v. DaVita Inc. et al., no. 21-CR-00229 (D. Colo. Apr. 15, 2022), ECF no. 264.5 Defendants’ Notice of Additional Authority, USA v. Surgical Care Affiliates LLC et al., no. 21-CR-00011 (N.D. Tex. Apr. 21, 2022), ECF No. 109.
