The United States indicted DaVita, Inc., and Kent Thiry, DaVita’s former Chief Executive Officer, last year alleging that they had violated Section 1 of the Sherman Act by engaging in “Conspiracy in Restraint of Trade to Allocate Employees.” The essential elements of the criminal charges were alleged agreements with competitors not to poach each other’s employees.
The trial began that on April 4, 2022, was among the first of its kind since the Department of Justice (DOJ) and the Federal Trade Commission (FTC) issued guidance in 2016 stating that the DOJ would prosecute naked no-poaching or wage-fixing agreements. On April 15, 2022, a federal jury found both DaVita and Thiry not guilty of criminal conspiracy. Additionally, on April 14, 2022, a federal jury in Texas found the owner of a physical therapy staffing company, Neeraj Jindal, and John Rodgers, a former clinical director of the company, not guilty of criminal charges related to employee wage-fixing.
While these verdicts may signal that juries are skeptical of the government’s efforts to criminally prosecute companies or individuals in these labor/employment cases, it is unlikely that the DOJ will cease pursuing these types of matters.
Ballard Spahr’s Labor and Employment and Antitrust Groups are prepared to answer questions regarding antitrust issues in the context of the labor market, as well as non-solicitation and no-poach provisions and have written a full alert on this matter here. Please contact us if we can assist you in understanding your company’s legal requirements and the measures your business must take to remain in compliance with applicable law.