Last week, the United States Department of Justice (“DOJ”) Antitrust Division suffered back-to-back trial defeats in its recent enforcement initiative to use the Sherman Act to stop employers from using allegedly anticompetitive tactics to suppress wages and employee mobility. In the first case, the DOJ’s first ever criminal wage-fixing prosecution ended with not guilty verdicts. In the second case, a national healthcare provider and its former CEO were acquitted on charges involving allegedly illegal “no-poach” agreements.
Continue Reading DOJ Antitrust Division Suffers Back-to-Back Trial Defeats in Wage Fixing and “No Poach” Cases

The US Department of Justice (DOJ) recently announced the indictment by a grand jury charging four owners/managers of home health care agencies in Maine with participating in a conspiracy to suppress wages and restrict the job mobility of personal support specialist (PSS) workers in violation of Section 1 of the federal Sherman Act. According to the indictment, the owners/managers agreed to fix the rates paid to these workers and also agreed not to hire each other’s workers. The DOJ warned in a press release that “[t]his indictment is the first in this ongoing investigation into wage fixing and worker allocation schemes in the PSS industry,” and part of a larger “ongoing federal antitrust investigation into wage fixing and worker allocation in the home health care industry.”
Continue Reading Alleged “No-Poach” Agreement in Health Care Industry Results in Another Criminal Antitrust Prosecution

This July, several Seyfarth attorneys signed a letter in response to President Biden’s Executive Order on Promoting Competition in the American Economy. On December 20, 2021, following the FTC’s and DOJ’s virtual workshop on “Making Competition Work: Promoting Competition in the Labor Markets” in early December, Seyfarth partners Dawn Mertineit, Robert Milligan, Kate Perrelli, and Erik Weibust
Continue Reading Seyfarth Partners Sign on to New Letter Urging Caution on Federal Regulation of Non-Competes

A recent Ninth Circuit ruling in a dispute between two health care staffing agencies clarifies that non-solicitation provisions in business-to-business collaboration agreements are not per se violations of the Sherman Act. Aya Healthcare Services, Inc. v. AMN Healthcare, Inc. No. 20-55679, 2021 WL 3671384 (9th Cir. Aug. 19, 2021).

Background and District Court Proceedings

When hospitals and other health care facilities have nursing shortages, travel nurses provide a temporary solution. Health care facilities often turn to staffing agencies to recruit nurses for these assignments.
Continue Reading Collaborate Away: Ninth Circuit Rules that Non-Solicitation Provisions in Collaboration Agreements Are Not Per Se Violations of Federal Antitrust Law

The Department of Justice recently announced that it had charged one of the largest independent oncology groups in the country, Florida Cancer Specialists & Research Institute LLC (“FCS”), with antitrust violations under the Sherman Act, an incredibly rare antitrust action against a health care provider and the first in 25 years. The DOJ’s investigation into criminal antitrust violations amongst oncology providers has led to the defendant’s agreement to pay a whopping $100M fine in exchange for the DOJ’s agreement to defer prosecution on the antitrust charges until 2023.
Continue Reading First, Do No Harm: Oncology Group Agrees to $100M Fine Following Criminal Antitrust Investigation

Within the last five months, the two executive arms responsible for enforcing antitrust laws—the US Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”)—held public workshops to examine the effect of non-compete clauses in employment contracts on the labor market. The DOJ held its workshop on September 23, 2019, while the FTC recently held its own at the top of the year, on January 9, 2020. The purpose of the FTC workshop was “to examine whether there is a sufficient legal basis and empirical economic support to promulgate a Commission Rule that would restrict the use of non-compete clauses in employer-employee employment contracts.”

Why the FTC now wants to regulate in the employment space is not readily apparent apart from attempting to capitalize on a low-hanging fruit populist issue concerning the overreporting of some companies allegedly using non-competes with low-wage workers.
Continue Reading A Solution in Search of a Problem? FTC Hosts Workshop to Consider Authority to Abolish Non-Competes

A group of 18 state attorneys general (the “AGs”) recently filed comments with the Federal Trade Commission (“FTC”) in advance of a series of hearings centered on changes to antitrust and consumer protection enforcement in the 21st century. The letter identifies four major areas where recent antitrust activity involving labor issues have occurred: (1) horizontal no-poach agreements between employers; (2) vertical no-poach agreements, particularly franchise agreements; (3) non-compete agreements between employers and employees; and (4) mergers impacting labor markets. Although it may reveal the enforcement priorities of its signatories, the letter’s arguments are mostly unsupported by any case law and in some respects are contrary to the Department of Justice’s positions on the matters.
Continue Reading State Attorneys General Urge FTC to Consider Labor Issues in Antitrust Enforcement

The Attorneys General of ten states are investigating fast food franchisors for their alleged use of “no poach” provisions in their franchise agreements, according to a press release by the New Jersey Attorney General’s Office, and as reported by NPR.  In a July 9, 2018 letter, the Attorneys General for New Jersey, Massachusetts, California, Washington, D.C., Illinois, Maryland, Minnesota, New York, Oregon, Pennsylvania, and Rhode Island requested information from eight fast food companies about their alleged use of such provisions.  The letter states that the Attorneys General “have learned that certain franchise agreements used in our States and the District of Columbia . . . may contain provisions that impact some employees’ ability to obtain higher paying or more attractive positions with a different franchisee.”  In other words, the agreements purportedly prohibit one franchisee of a particular brand from hiring employees of another franchisee of the same brand.  
Continue Reading State Attorneys General Investigate Fast Food Franchisor “No Poach” Agreements

This post originally appeared on the Workplace Class Action blog.

Seyfarth Synopsis: There are currently pending at least four class actions claiming that provisions contained in franchise agreements prohibiting the hiring of employees of other intrabrand franchisees without the consent of their employer violate the antitrust laws.  That being said, in 1993 the Ninth Circuit affirmed summary judgment in favor of a franchisor in a similar “no-hire” case.  It reasoned that due to the control the franchisor exercised over its franchisees, the franchisor and its franchisees were incapable of conspiring in violation of Section 1 of the Sherman Act. While the so-called “single enterprise” defense is potentially available, franchisors should be cognizant that in developing that defense, they may create evidence or admissions that would support a subsequent claim that the franchisors are joint employers of their franchisees’ employees.  In light of the availability of other defenses, franchisor employers should assess whether the joint employer risk is worth accepting in order to pursue the single enterprise defense. 
Continue Reading Franchise “No-Hire” Agreement Class Actions And The Single Enterprise Defense

This post originally appeared on the Workplace Class Action blog

Seyfarth Synopsis: True to his word, the Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice has announced the first of a number of anticipated no-poach enforcement actions. While this was a civil proceeding, the Department of Justice has said that in some cases it may treat the conduct as criminal. Many executives and HR professionals are unaware that the antitrust laws apply to the employment marketplace. Thus, if they have not done so already, employers should consider the implementation of compliance programs to make sure that appropriate employees are aware of these developments and risks.
Continue Reading DOJ Announces First of a Number of Anticipated No-Poach Enforcement Actions – What Should Employers Do Now?