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
State Attorneys General Urge FTC to Consider Labor Issues in Antitrust Enforcement
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.
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Seven Fast Food Franchisors Agree To Stop Using “No Poach” Agreements Just Days After Announcement of State Attorney General Investigations
We reported yesterday that the attorneys generals of ten states are investigating several fast food franchisors for their use of so-called “no poach” provisions in their franchise agreements. Well, less than twenty-four hours later, the New York Times has reported that seven fast food franchisors (mostly different ones than those who received the information demands discussed yesterday) entered into agreements
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Franchise “No-Hire” Agreement Class Actions And The Single Enterprise Defense
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.
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DOJ Announces First of a Number of Anticipated No-Poach Enforcement Actions – What Should Employers Do Now?
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?