In brief

On 9 July 2021, President Joe Biden issued an executive order (EO) announcing his administration’s commitment to increasing vigorous antitrust enforcement. At the one-year anniversary of the EO, a recent flurry of enforcement efforts signals that the Department of Justice (DOJ) remains vigilant in carrying out the EO’s initiatives, especially in the labor markets.

Contents

  1. Background
  2. Health care staffing resolution
  3. Poultry settlement
  4. DOJ-NLRB partnership
  5. Key takeaways

Background

In 2016, the DOJ Antitrust Division and Federal Trade Commission (FTC) published guidance signaling that anti-competitive conduct in the labor markets could violate the antitrust laws. This guidance warned that competing employers’ agreements to fix employees’ compensation or not to poach each other’s employees may be subject to criminal prosecution.

More recently, the EO called on federal agencies to scrutinize anti-competitive conduct and pursue more aggressive enforcement. The EO promoted a “whole-of-government approach” to competition policy encouraging agencies to protect competition using their statutory authority.

Health care staffing resolution

A health care staffing company and its former regional manager are nearing a resolution for charges of conspiring with a competing staffing company to suppress wages for Las Vegas school nurses.

On 30 March 2021, a federal grand jury returned an indictment in the US District Court for the District of Nevada charging the company and manager with participating in a conspiracy to allocate employee nurses and to fix their wages in violation of the Sherman Act. Specifically, the indictment charges the manager with agreeing with a co-conspirator not to recruit or hire nurses staffed by each other’s companies at Clark County School District facilities and not to raise the wages of those nurses.

In his motion to dismiss, the manager accused the DOJ of prosecutorial misconduct, arguing that an FBI agent improperly interviewed him without counsel present and without informing him that there was an active criminal investigation and that three DOJ attorneys were listening to the interview through real-time audio livestream.1 The manager contended that these violations of his constitutional rights necessitated dismissal of the indictment or suppression of the illegally obtained interview statements. The company filed a motion to dismiss as well, arguing that there is no precedent or statutory basis for treating the alleged agreement as a per se violation under the Sherman Act.2

During a status conference on 12 May 2022, the court preliminarily stated that the company’s motion to dismiss would be denied and also scheduled an evidentiary hearing for 29 June 2022 regarding the manager’s motion to suppress. A few days before the scheduled hearing, the parties requested that the hearing be continued, explaining that they had reached a preliminary resolution and needed additional time to finalize the agreement.3

The potential resolution would mark the DOJ’s first successful criminal prosecution of antitrust violations in the labor markets following consecutive acquittals earlier this year. On 14 April 2022, a jury acquitted a therapist staffing company’s former owner and former clinical director of conspiring to fix compensation for physical therapy professionals. The jury convicted the owner only of obstructing a related FTC investigation. The next day, a jury acquitted a dialysis company and its former chief executive officer of conspiring to suppress competition for employees.4 Following these acquittals, an alleged co-conspirator in a related prosecution filed a notice of additional authority—namely, the acquittals—supporting its pending motion to dismiss the criminal antitrust charges against it.5 However, these setbacks have not deterred the DOJ, as demonstrated by the forthcoming resolution in the health care staffing prosecution.

Poultry settlement

On 25 July 2022, the DOJ announced a civil settlement with a data consulting firm, its president, and three poultry processors to end a conspiracy to exchange information about wages and benefits for poultry processing plant workers and to collaborate on worker compensation decisions in violation of the Sherman Act.

In a complaint and proposed consent decree filed in the US District Court for the District of Maryland, the DOJ set forth a range of settlement terms, including a requirement that the poultry processors pay USD 84.8 million in restitution for workers who were harmed by the information exchange conspiracy. The proposed consent decree would prohibit the poultry processors from sharing competitively sensitive information about poultry processing plant workers’ compensation.

The proposed consent decree would also impose a court-appointed antitrust compliance monitor who will ensure the poultry processors’ compliance with the settlement terms for the next ten years. The compliance monitor would have broad authority to ensure the poultry processors’ compliance with the federal antitrust laws as they relate to the companies’ poultry processing facilities, plant workers, chicken growers, and other areas of their businesses. The compliance monitor would submit regular reports on the poultry processors’ antitrust compliance. The requirement of a compliance monitor in the poultry settlement is consistent with recent remarks by the Deputy Attorney General and Assistant Attorney General for the Criminal Division making clear that the DOJ will increasingly impose compliance monitors to ensure that companies are living up to their compliance obligations.

Notably, on the same day that the DOJ announced the poultry settlement, New York Attorney General Letitia James announced a settlementwith two title insurance companies to end a no-poach conspiracy, requiring the companies to pay USD 1.25 million and to cooperate with the ongoing investigation. This settlement shows that protecting competitive labor markets is a priority not only for the DOJ, but for state antitrust enforcers as well.

DOJ-NLRB partnership

On 26 July 2022, the DOJ and National Labor Relations Board (NLRB) signed a memorandum of understanding (MOU) to strengthen their partnership in protecting competitive labor markets and promote workers’ rights under the labor laws. The DOJ-NLRB MOU encourages greater coordination and information sharing between the two agencies to maximize the enforcement of the labor laws under the NLRB’s jurisdiction and the antitrust laws enforced by the DOJ.

One week prior to the MOU between the DOJ and NLRB, the FTC announced that it was joining the NLRB in a similar MOU to protect workers against anticompetitive practices. The FTC-NLRB MOU outlines how the FTC and NLRB will work together to address issues such as labor market concentration, labor developments in the “gig economy,” and one-sided and restrictive contract provisions, including noncompete and nondisclosure provisions. Stemming from the EO’s whole-of-government approach, these MOUs demonstrate a commitment across federal agencies to work together proactively to attack labor competition issues.

Key takeaways

The recent flurry of enforcement efforts emphasizes the DOJ’s continued focus on protecting competition in the labor markets. Indeed, the potential resolution in the health care staffing prosecution, along with the DOJ’s recent poultry settlement and partnership with the NLRB, underscore that the DOJ is maintaining its momentum in its campaign against antitrust violations in the labor markets. In light of these enforcement efforts, companies should review and invest in improving their compliance programs to ensure they adequately monitor for and remediate anti-competitive conduct affecting the labor markets.