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

Arnall Golden Gregory LLP

The Department of Justice’s Antitrust Division (DOJ) has once again indicted health care individuals and a health care 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 health care companies, should be aware of this indictment because the DOJ continues to pursue Wage Fixing and No-Poaching Agreement cases in the health care 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 health care 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.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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