Criminal antitrust is burning a path in prosecuting illegal wage-fixing agreements in labor markets.  The Justice Department warned companies over five years ago and now DOJ is executing on its warning.  Over the last two years, the Antitrust Division has indicted four companies and seventeen (17) individuals.  The Antitrust Division is promising more indictments.

At the end of 2021, DOJ indicted six individuals, one of whom worked at Pratt Whitney, in a major case against aerospace engineering firms.  Prior to this case, DOJ focused its initial cases against healthcare companies. 

Last week, DOJ announced another major indictment against four managers of home health care agencies for conspiracy to suppress the wages and restrict job mobility of essential workers during the COVID-19 pandemic.  DOJ announced the indictment as the beginning of a larger investigation into wage fixing and worker allocation schemes involving the Personal Support Specialist (PSS) workers.

The four defendants were charged in the case United States v. Faysal Kalayaf Manahe et al.  The defendants owned and managed home health care workers, commonly referred to as Personal Support Specialists (PSS). Each PSS is paid an hourly wage.  Home health care agencies submit reimbursement claims from Medicaid for eligible expenses.  In response to the COVID-19 pandemic and the need for home health care services, Maine announced an increase in reimbursement rates for PSS employees. Home health care agencies were also eligible for Paycheck Protection Program loans.

The four defendants all resided and operated in the Portland, Maine area. As charged in the indictment, the four defendants and their respective companies conspired to fix wages of PSS employees and to refrain from hiring each other’s’ PSS employees.  The indictment alleges that the defendants coordinated communications among themselves by setting up a group chat function among themselves entitled “Home Care.”  The defendants attended virtual meetings to discuss and agree to levels of PSS wages. The defendants also met in person and discussed PSS wages and agreements among themselves.

As an example, the indictment alleged that around April 7 to 9, 2020, the defendants agreed via a group chat to fix the wages paid to PSS employees at $15 per hour for non-certified workers, and $16 per hour for certified workers.

The defendants also agreed to pressure other home health care agencies to ensure that they did not pay PSS employees at higher rates than the $15 to $16 range. In some cases, members of the conspiracy contacted Maine state authorities to request an investigation of these companies for compliance issues.

In seeking additional companies to join the conspiracy, members of the existing conspiracy drafted specific language for certifications by new members that would restrict the ability of new members to pay PSS employees higher than the agreed on rates.  The market rate for PSS employees increased because of the increase in Maine’s reimbursement rates because of the COVID-19 pandemic.  By preserving low employee rates, home health care agencies margins increased (the difference between reimbursement hourly rate and specific rate paid to PSS employees).