DOJ Files First Indictment Charging No-Poach Labor Agreement

By: Robert Connolly (Cartel Capers)

On January 5, 2021, a federal grand jury returned an indictment charging a criminal violation of the Sherman Act based on an agreement not to poach each other’s employees.  US. v. Surgical Care Affiliates LLC and SCAI Holdings, LLC, Case 3:21-cr-00011-L, filed January 5, 2021 (N.D. Texas)(SCAI Holdings is the successor corporation to Surgical Care Affiliates). This is the Antitrust Division’s first criminal case targeting employee no-poach agreements between competitors.  According to the DOJ Press Release:

“The indictment, filed in the U.S. District Court for the Northern District of Texas, Dallas Division, charges SCA with entering into and engaging in two separate bilateral conspiracies with other health care companies to suppress competition between them for the services of senior-level employees, in violation of the Sherman Act. Beginning at least as early as May 2010 and continuing until at least as late as October 2017, SCA conspired with a company based in Texas to allocate senior-level employees by agreeing not to solicit each other’s senior-level employees. Beginning at least as early as February 2012 and continuing until at least as late as July 2017, SCA separately conspired with a company based in Colorado to allocate senior-level employees through a similar non-solicitation agreement…”

The SCA indictment follows on the heels of a December indictment of the former owner of a Dallas area therapist staffing company for participating in a wage-fixing conspiracy for therapists (here).  On the surface at least, the two cases appear to be unrelated. But, the cases demonstrate that collusive agreements that restrain, limit or suppress competition for employees, especially in the health care industry, are an Antitrust Division priority…

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