United States: DOJ continues to prioritize the protection of competitive labor markets

In short

On July 9, 2021, President Joe Biden issued an Executive Order (EO) announcing his administration’s commitment to strengthening strong antitrust enforcement. On the one-year anniversary of EO, a recent flurry of enforcement efforts indicates that the Department of Justice (DOJ) remains vigilant in implementing EO initiatives, particularly in the marketplaces. work.


Contents

  1. Background
  2. Resolution on Health Staffing
  3. poultry colony
  4. DOJ-NLRB Partnership
  5. Key points to remember

In 2016, the Antitrust Division of the DOJ and the Federal Trade Commission (FTC) issued guidance warning that anti-competitive behavior in labor markets could violate antitrust laws. The guidelines warned that agreements between competing employers to fix employee compensation or not to poach each other’s employees could be subject to criminal prosecution.

More recently, the EO asked federal agencies to carefully examine anticompetitive behavior and pursue more aggressive enforcement. The EO has promoted a “whole-of-government approach” to competition policy, encouraging agencies to protect competition using their statutory authority.

A healthcare recruiting firm and its former regional manager are set to settle charges of conspiring with a competing recruiting firm to suppress salaries for nurses at the Las Vegas school.

On March 30, 2021, a federal grand jury returned an indictment in the U.S. District Court for the District of Nevada accusing the company and the director of participating in a conspiracy to assign employed nurses and fix their wages in violation of the Sherman Act. Specifically, the indictment accuses the principal of agreeing with a co-conspirator not to recruit or hire nurses employed by the other’s companies at Clark County School District facilities and not raise the salaries of these nurses.

In his motion to dismiss, the director accused the DOJ of prosecutorial misconduct, arguing that an FBI agent had improperly interrogated him without an attorney present and without informing him that there was a active criminal investigation and that three DOJ attorneys were listening to the interview through real-time live audio.1 The director argued that these violations of his constitutional rights necessitated the dismissal of the indictment or the suppression of the illegally obtained interview statements. The company also filed a motion to dismiss, arguing that there is no precedent or legal basis for treating the alleged deal as a per se violation under the Sherman Act.2

At a status conference on May 12, 2022, the court ruled on a preliminary basis that the company’s motion to dismiss would be denied and also scheduled a status hearing on June 29, 2022 regarding the motion to dismiss. removal of the director. A few days before the scheduled hearing, the parties requested that the hearing continue, explaining that they had reached a preliminary resolution and needed more time to finalize the agreement.3

The potential resolution would mark the DOJ’s first successful criminal prosecution for violating labor markets antitrust laws after back-to-back acquittals earlier this year. On April 14, 2022, a jury acquitted the former owner and former clinical director of a therapist recruitment firm of conspiracy to fix compensation for physical therapy professionals. The jury convicted the owner solely of obstructing a related FTC investigation. The next day, a jury acquitted a dialysis company and its former CEO of conspiring to suppress competition for employees.4 Following these acquittals, an alleged co-conspirator in a related lawsuit filed an additional opinion of authority, namely the acquittals, in support of his pending motion to dismiss the criminal antitrust charges against him.5 However, these setbacks have not deterred the DOJ, as demonstrated by the upcoming resolution in the healthcare staffing lawsuit.

On July 25, 2022, the DOJ announced a civil settlement with a data consulting firm, its president, and three poultry processors to end a conspiracy to exchange processing plant worker wage and benefit information. poultry and assisting in workers’ compensation decisions in violation of the Sherman Act.

In a lawsuit and proposed consent decree filed in the U.S. District Court for the District of Maryland, the DOJ set out a series of settlement terms, including a requirement that poultry processors pay $84.8 million in compensation for workers who have been harmed by the information. swap plot. The proposed consent decree would prohibit poultry processors from sharing competitively sensitive information about compensation for workers in poultry processing plants.

The proposed consent decree would also mandate a court-appointed antitrust compliance monitor who will ensure poultry processors’ compliance with settlement terms for the next ten years. The compliance monitor would have broad authority to ensure that poultry processors comply with federal antitrust laws regarding poultry processing facilities, plant workers, chicken farmers and other areas of their activities. The compliance monitor would submit regular reports on the antitrust compliance of poultry processors. The requirement for a compliance monitor in the Poultry Regulations is consistent with recent remarks by the Deputy Attorney General and the Assistant Attorney General of the Criminal Division, making it clear that the DOJ will increasingly mandate compliance monitors. compliance to ensure companies meet their compliance obligations.

Notably, on the same day the DOJ announced the poultry settlement, New York Attorney General Letitia James announced a settlement with two title insurance companies to end an anti-poaching conspiracy, forcing the companies to pay $1.25 million and cooperate with the ongoing investigation. . This settlement shows that protecting competitive labor markets is a priority not only for the DOJ, but also for state antitrust authorities.

On July 26, 2022, the DOJ and the National Labor Relations Board (NLRB) signed a Memorandum of Understanding to strengthen their partnership in protecting competitive labor markets and promoting workers’ rights under labor laws. The DOJ-NLRB Memorandum of Understanding encourages greater coordination and information sharing between the two agencies to maximize enforcement of labor laws within the jurisdiction of the NLRB and antitrust laws enforced by the DOJ.

A week before the DOJ-NLRB memorandum of understanding, the FTC announced that it was joining the NLRB in a similar memorandum of understanding to protect workers from anti-competitive practices. The FTC-NLRB Memorandum of Understanding outlines how the FTC and NLRB will work together to address issues such as labor market concentration, the changing workforce in the “gig economy” and unilateral and restrictive contractual provisions, including non-competition and non-disclosure provisions. Stemming from the whole-of-government approach to EO, these memoranda of understanding demonstrate the commitment of federal agencies to proactively work together to address labor competition issues.

The recent flurry of enforcement efforts underscores the DOJ’s continued focus on protecting competition in labor markets. Indeed, the potential resolution of healthcare personnel lawsuits, along with the DOJ’s recent poultry settlement and partnership with the NLRB, underscores that the DOJ is maintaining momentum in its campaign against antitrust violations in labor markets. In light of these enforcement efforts, companies should review and invest in improving their compliance programs to ensure that they adequately monitor and address anti-competitive behavior affecting labor markets.


1 Defendant Ryan Hee’s motion to dismiss or in the alternative motion to strike at 4, United States v. Hee et al., no. 21-CR-00098 (D. Nev. 3 Sept. 2021), ECF. No. 38.
2 Defendant VDA OC’s motion for dismissal at 5, United States v. Hee et al., no. 21-CR-00098 (D. Nev. 3 Sept. 2021), ECF. No. 37.
3 Order Stipulating Continued Hearing of Evidence, United States v. Hee et al., No. 21-CR-00098 (D. Nev. June 24, 2022), ECF. No. 93. The court granted this request and postponed the hearing to August 10, 2022. Id.
4 jury verdict, United States v. Da Vita Inc. et al., No. 21-CR-00229 (D. Colo. April 15, 2022), ECF No. 264.
5 Defendants Notice of Additional Authority, United States v. Surgical Care Affiliates LLC et al., No. 21-CR-00011 (ND Tex. April 21, 2022), ECF No. 109.

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