In a blow to the Biden Administration’s goal to heighten enforcement of labor-related competitor agreements, a Maine jury on Wednesday acquitted four home-health operators who were accused of conspiring to fix the wages of home-health workers in the Spring of 2020. The U.S. Department of Justice (“DOJ”) had alleged that the operators violated Section 1 of the Sherman Act (15 U.S.C. § 1) by making a secret pact to set wages at $15 to $16 per hour and agreeing to allocate workers by not hiring each other’s employees. The conspiracy was allegedly carried out via an encrypted messaging app and both virtual and in-person meetings. Those meetings also allegedly resulted in an agreement to recruit other operators to join the conspiracy.
The not-guilty verdict is the third time in less than a year that the DOJ lost a labor-related antitrust case in the healthcare sector. In April 2022, the DOJ faced a similar trial loss in Denver when a jury acquitted dialysis provider DaVita, Inc. and its former CEO of allegedly negotiating agreements with rival companies to not solicit each other’s employees. That same month, a Texas jury acquitted the former owner and clinical director of a physical therapist staffing company of conspiring to lower wages of physical therapists. The DaVita case and staffing company case were the DOJ’s first criminal no-poach and wage-fixing challenges.
Despite these losses, the DOJ shows no sign of stopping its investigation and prosecution of conduct in healthcare labor markets. Just last week, the DOJ indicted a Las Vegas executive for his alleged role in a conspiracy to fix wages of nurses at three different home-health agencies from 2016 to 2019. Upon the indictment, Assistant Attorney General of the DOJ’s Antitrust Division Jonathan Kanter promised that “[t]he Antitrust Division will be vigilant in protecting workers.”
The DOJ has seen some minor wins in this realm, which has helped bolster the agency’s efforts. Before losing at trial in the Texas case, the DOJ won a motion to dismiss. The judge observed that “price-fixing agreements — even among buyers in the labor market — have been per se illegal for years.” In October 2022, the DOJ also secured its first criminal guilty plea in a no-poach case against a health care staffing company.
The DOJ’s pursuit of criminal wage-fixing and no-poach cases follow President Joe Biden’s July 2021 Executive Order on Promoting Competition in the American Economy. The Executive Order details the Administration’s goal of creating a more competitive labor market and healthcare market. President Biden recently reiterated the need for a competitive labor market when he highlighted non-compete agreements in his second State of the Union Address on February 7, 2023.
As the DOJ continues to investigate and prosecute labor-related anticompetitive agreements in the health care space, companies would be well-advised to review and potentially revise their existing antitrust compliance programs to ensure those programs adequately address, and can readily identify, conduct that could lead to these types of concerns.