After many attempts, the Department of Justice Antitrust Division (DOJ or Division) has scored the first guilty verdict on a wage-fixing case. For years, the Division has prosecuted wage-fixing and no-poach agreements with little success, but they remained adamant that labor-related price-fixing and market allocation are as illegal as price-fixing and customer allocation. The incoming heads of US antitrust enforcement have taken up the mantle and supported the claims, and now a jury has convicted a home healthcare staffing owner of fixing the wages of nurses.
Companies have long been on notice that no-poach and wage-fixing agreements are antitrust violations and that they should ensure their employees responsible for hiring and setting wages understand the laws and comply. This guilty verdict marks a good time to review that guidance. Given the DOJ’s recent guidance on tailoring criminal antitrust compliance programs to a company’s industry, companies who hire registered nurses and licensed practical nurses would be wise to include the fact pattern from this case, United States v. Lopez, in their compliance training materials.
Key Facts
The indictment in United States v. Lopez provides key facts that serve as useful reminders of what not to do. Below are the allegations:
- Lopez texted several companies messages about hourly rates. Several messages mentioned “agreed rates” and “deals” providing evidence of an agreement.
- Several companies shared, collected, monitored, and discussed wages for RNs and LPNs.
- The companies paid the agreed upon rates and the rates were not competitive.
The indictment also included wire fraud charges based on Lopez’s omission to an acquiring firm in due diligence of the DOJ’s investigation when he sold his business for $12.5 million.
Takeaways
Companies can take the following steps to reduce the risk of antitrust challenges:
- Remind employees of their obligations to comply with the antitrust laws and that text messages or other message services might be subject to discovery, even if they are contained on personal devices.
- Remember that in price-fixing, bid rigging, and market allocation cases, the agreement itself is the crime.
- Employees should not discuss wages or hiring with competitors. The DOJ views competitors broadly and includes companies that compete for workers. Competitors are not necessarily those companies that compete with a company’s products or services offerings.
- Companies have disclosure obligations in acquisition due diligence and concealing an investigation could increase a company’s risk. Consult attorneys for disclosure obligations.
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