Antitrust Division Charges Health Care Staffing Company with Criminal Wage-Fixing and No-Poaching Agreement
The Justice Department’s Antitrust Division is pushing criminal enforcement against companies for illegal wage-fixing among competitors in the hiring market. After years of warning companies that DOJ intended to prosecute criminal cases for illegal cartel activity in labor markets, DOJ is delivering on its warning.
In its third announced criminal case, DOJ has indicted VDA OC, LLC, a health care staffing company that supplied nurses for a public school district in Nevada for agreeing with a competitor not to raise wages or hire nurses from each other. The grand jury also indicted Ryan Hee, a former manager for the predecessor company to VDA OC, LLC.
DOJ has brought three separate criminal prosecutions involving labor market collusion, all in the health care market.
As alleged by DOJ, the criminal conspiracy occurred between October 2016 and July 2017, when new ownership acquired VDA OC, LLC. Advantage had a contract with Clark County School District for nurses that provide constant care to students with medical needs. The nurses perform specialized health procedures and accompany medically fragile students at school and on bus rides.
VDA’s predecessor had agreed with an unnamed co-conspirator to not recruit or hire nurses from each other and to refrain from raising nurses’ wages. A third company is referenced in the indictment as participating the alleged conspiracy. It is likely that the two un-named co-conspirators are cooperating with the DOJ prosecution.
The indictment outlines specific communications occurring between Ryan Hee, a former regional manager, and various co-conspirators. In an email dated October 21, 2016, Ryan Hee stated to a co-conspirator, “Per our conversation, we will not recruit any of your active [CCSD nurses],” and the co-conspirator responded, “Agreed on our end as well. I am glad we can work together through this, and assure that we will not let the field employees run our businesses moving forward.”
As part of the illegal agreement, the staffing competitors agreed that if a nurse sought employment with the competing company, the competitor would immediately notify the employing company and not discuss employment of the nurse.
Ryan Hee described the understanding, “If anyone threatens us for more money, we will tell them to kick rocks?”
The Justice Department has repeatedly warned companies since 2016 that it would prosecute labor collusion agreements akin to traditional illegal price-fixing and cartel conduct. Notwithstanding these statements and press reports about ongoing investigations, DOJ brought its first criminal case in December 2020 when it indicted a physical therapist staffing company for illegal wage-fixing. In January 2021, DOJ indicted another company for two antitrust violations for illegal agreements among outpatient surgical facilities not to solicit each other’s senior-level executives.