Federal Judge Allows Criminal Charges For No-Poach Wage Fixing

In January of 2022, a federal judge in the District of Colorado denied the motion to dismiss criminal antitrust charges against Davita Inc. and their one-time CEO, allowing the charges that allege they colluded with competitors to fix wages through no-poach agreements.

The Department of Justice (DOJ) filed criminal charges against the former CEO and the corporation in 2021. The allegations include that Davita Inc. conspired to “a continuing agreement, understanding, and concert of action among DaVita … that DaVita and [co-conspirator] SCA would allocate senior-level employees by not soliciting each other’s senior level employees across the United States.”

In November of 2021, a federal judge in Texas upheld another DOJ no-poach antitrust charge for allegations of collusion to fix wages in the physical therapy market. The Texas judge held that price fixing of labor is per se unlawful and criminal charges can follow regardless of any analysis of the size of the effects on the market.

Department of Justice Sends Notice to Other Courts of No-Poach Wage Fixing Charges

With the wage fixing criminal charges being supported past dismissal, the DOJ has filed notices across the United States pointing to the District of Colorado decision. The DOJ files criminal charges in per se cases only by matter of policy, and they are signaling the upholding of the charges as per se illegal activity will lead the DOJ to file more charges if more companies collude to fix wages.

The Department of Justice has filed additional charges, including charges in Nevada for allegations of wage price fixing of Las Vegas Clark County school nurses. In that case the defendants argued no court had held price fixing to be per se illegal, but now multiple judges and courts have decided just that.

No-Poach Wage Fixing Allegations Against Davita Inc.

The complaint by the DOJ against Davita contain allegations that the no-poach agreement was formalized by meetings between the co-conspirators, monitoring for compliance by the co-conspirators, remedy efforts by co-conspirators if any violation of the alleged illegal wage-fixing occurred. These allegations are in addition to those concerning the general refraining of solicitation of senior employees at the heart of the claims.

The complaint outlines allegations that the wage-fixing began in April 2017 and continued through at least July 2019. A grand jury indicted Davita and their previous CEO after hearing the allegations and DOJ arguments in favor of criminal charges.

No-Poach Agreement Lawsuits

The DOJ and state Attorneys General have become more active in investigating and enforcing action against companies who illegally agree to not poach employees from each other. When competitors in a market seek to collude, whether on prices paid by customers or prices they pay for labor, both federal and state antitrust laws can be violated. The DOJ published “Antitrust Guidance for Human Resource Professionals” in 2016 to assist companies from creating illegal agreements to constrain labor movement. If you know of a no-poach agreement that has affected employees, please contact an experienced antitrust attorney to review your claim. Schedule a free consultation with our knowledgeable employment litigation lawyers at Schneider Wallace.

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