Human Resources Professionals: Antitrust Guidance
Guest Article Provided by Elizabeth Hogue, Esq.
The Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) mean business when it comes to antitrust violations! During his 2020 presidential campaign, President Biden said: “It’s simple: companies should have to compete for workers just like they compete for customers. We should get rid of noncompete clauses and no-poaching agreements that do nothing but suppress wages.” Then, in July of 2020, President Biden issued an Executive Order which, among other provisions, urged the FTC to regulate noncompete agreements. There has also been plenty of enforcement action.
Four home health managers at several agencies in Maine, for example, were recently indicted by a federal grand jury on felony charges related to antitrust violations. The providers agreed among themselves to pay personal care workers between $15 and $16 per hour, pressured other home health agencies to do the same, and threatened to report other managers to Maine’s Medicaid Program if they didn’t comply. According to the indictment, they conspired to suppress wages and limit job mobility by agreeing to fix workers’ rates of pay and to refrain from hiring workers from each other’s companies. They allegedly conspired to deprive workers of opportunities to earn better wages.
In United States v. DaVita, Inc. [No. 1:21-cr-00229-RBJ (D. Colo. Jan. 28, 2022)], the government claimed that outpatient medical facilities agreed not to solicit each other’s senior-level employees. The Judge in this case refused to grant DaVita’s motion to dismiss on the basis that non-solicitation and no-hire agreements are unlawful when they are used as a basis for a naked agreement to allocate markets.
What should providers do? In 2016, the FTC and the DOJ jointly issued “Antitrust Guidance for HR Professionals.” This Guidance includes “red flags” for human resource managers. Human resource managers and their colleagues should not:
- Agree with another company about employee salaries or other terms of compensation, either at a specific level or within a range
- Agree with another company to refuse to solicit or hire another company’s employees
- Agree with another company about employee benefits to be provided
- Agree with another company on other terms of employment
- Urge competitors not to compete aggressively for employees
- Exchange specific information about employee compensation or terms of employment with another company for the purposes of agreeing to limit either
- Participate in meetings, including trade association meetings, during which the above topics are discussed
- Discuss the above topics with colleagues at other companies, including at social events or in other non-professional settings
- Review documents that contain another company’s internal data about employee compensation
It’s a new environment for anti-trust enforcement, especially in the healthcare industry. Providers should pay close attention to this issue.
©2022 Elizabeth E. Hogue, Esq. All rights reserved.
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