Antitrust and Unfair Competition Law
A Deeper Dive: Antitrust Division, USDOJ Suffers Labor Case Setbacks but Pledges to Press On
By Bob Connolly
Law Office of Robert Connolly
The Antitrust Division has been aggressively investigating collusive wage-fixing and no-poach agreements in labor markets and bringing criminal cases when they believe a “naked” (not ancillary to a procompetitive agreement) agreement has been uncovered. The Antitrust Division recently suffered two consecutive setbacks in its initial labor market collusion jury trials. On April 14, 2022, a Texas federal jury returned not guilty verdicts for two former health care executives in the DOJ’s first ever wage-fixing case. United States v. Jindal, case No. 4:20-cr-00358 (E.D. Texas). One day later, on April 15, 2022, a federal jury in Colorado acquitted DaVita, Inc. and its former chief executive on all counts of conspiring with other companies in an employee allocation case. United States v. DaVita Inc., Crim. No. 21-cr-00229 (D. Colo).
In both cases, however, the DOJ survived motions by the defendants to have to indictments dismissed. Defendants had argued that the alleged agreements did not constitute per se violations of the Sherman Act. The DOJ argued that buyer side labor market agreements in restraint of trade are no different than seller cartels, and therefore, while the courts did not have extensive experience with these particular restraints, the allegations were of a per se nature. In both cases, the DOJ obtained rulings allowing the indictment to stand so the losses at trial should be viewed as a failure of proof in those cases, not a defect in the government’s legal theory. The DOJ has vowed to press on with what it views as “naked” wage-fixing and/or no-poach (employee allocation) cases. It is early in their effort with several other cases under indictment and due to be tried. But the message is clear that these types of cases are a priority for the Biden administration and the number of matters reportedly under investigation is a message that this is an area in great need of antitrust compliance training.