DOJ Antitrust’s Ongoing Criminal Investigation of Labor Market Collusion in Health Care Industry Nets DaVita and Former CEO

The health care industry is taking it on the chin these days.  As DOJ increases False Claims Act prosecutions, the primary targets are pharmaceutical, medical device and health care providers. 

So let’s add to the list of risks and prosecutions coming down the line – DOJ’s Antitrust Division is targeting health care companies for labor market collusion agreements among competitors not to solicit or hire certain employees from each other.

In its most recent action, DOJ announced the indictment of DaVita and its former CEO, Kent Thiry, for colluding with competing employers not to solicit or hire certain employees.  DaVita owns and operates outpatient dialysis and kidney care.

DOJ has disclosed that the most recent charges are the result of the Antitrust Division’s ongoing investigation into employee allocation agreements in the health care industry.  DaVita’s co-conspirator Surgical Care Affiliates was charged earlier in the year and the case against SCA is currently pending.

DOJ’s charges allege that DaVita and Thiry participated in two separate conspiracies.  The first count charges DaVita and Thiry with conspiring with SCA over a five-year period, 2012 to 2017, to allocate senior-level employees by agreeing not to solicit each other’s senior-level employees. 

The second count charges DaVita and Thiry for conspiring with another health care company over a two-year period to allocate employees by agreeing that the other health care company would not solicit DaVita’s employees. 

The indictment cited email communications among various officers and employees concerning the illegal agreements.

For example, on October 20, 2014, Thiry emailed an individual that “Someone called me to suggest they reach out to your senior biz dev guy for our corresponding spot.  I explained I do not do proactive recruiting into your ranks.”

On October 16, 2015, an individual emailed SCA’s human resources executive: “Putting two companies in italics ([Company A] and DaVita) — we can recruit junior people (below Director), but our agreement is that we would only speak with senior executives if they have told their boss already that they want to leave and are looking.”

In another example, on December 12, 2015, SCA’s human resources executive emailed a recruiter stating that “note that [a competitor of SCA] and Davit are off limits to SCA.”

On April 26, 2016, SCA’s human resources executive emailed a candidate from DaVita who she could not recruit from DaVita “unless candidates have been given explicit permission by their employers that they can be considered for employment with us.”

DaVita and SCA jointly refrained from soliciting each other’s senior-level employees – on April 7, 2017, an individual was contacted by a consultant concerning his interest in a candidate employed by DaVita, and the individual responded: “In order to pursue [candidate], he would need to have already communicated that he is planning to leave DaVita – that’s the relationship that we have with DaVita.” The consultant responded, “I’m glad you arrived at that agreement with KT,” which prosecutors said was a reference to Thiry.

The second conspiracy between DaVita, Thiry and an unnamed competitor occurred over a two-year period and operated similarly to the DaVita-SCA conspiracy.  In a 2018 email to Thiry, the CEO of the unnamed company stated, “our relationship matters more to me than any potential addition to our team,” noting that the company did not follow through with inquiries from four people who had reached out for job opportunities over the past year.

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  1. July 23, 2021

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