Duke Faces Antitrust Class Action Over Faculty Hiring

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By Lawrence E. Dubé

Duke University and the University of North Carolina are bitter basketball rivals, but according to a class action, they were partners in an unlawful hiring arrangement.

A radiologist alleging Duke and UNC entered into an unlawful no-hire agreement convinced a federal court to treat her lawsuit as a class action on behalf of nearly 5,500 faculty members.

Dr. Danielle Seaman alleges that when she applied for a UNC position in 2015, she was told an agreement between the universities and their medical schools prohibited UNC from hiring a member of the Duke faculty.

Seaman claims the agreement violated the Sherman Act, a federal antitrust law, while Duke denies having any no-raiding or no-hire pact with UNC or its affiliates.

The U.S. District for the Middle District of North Carolina hasn’t reached the merits of the lawsuit, but Judge Catherine C. Eagles agreed with Seaman that the case should proceed as a class action. However, Eagles rejected Seaman’s proposal to include non-faculty medical staff in the class action.

Eagles said it was appropriate to certify the radiologist’s lawsuit as a class action because a central issue—an alleged agreement the universities wouldn’t compete in faculty hiring—affects all of the Duke and UNC faculty members who are in the proposed class.

Seaman says the alleged agreement had the effect of suppressing faculty compensation because it reduced the universities’ need to offer or maintain attractive salaries to recruit or retain qualified faculty. The radiologist proposes to offer expert testimony and analysis to support a claim for damages for the class, a factor that supports treating the case as a class action, the court said. Eagles said the anticipated evidence about faculty hiring is “relatively straightforward,” but she said combining the faculty claims with those of non-faculty health-care employees would be “unduly complicated,” and she limited the class action to faculty members

Eagles certified a class of all Duke University and Duke University Health System faculty employed since 2012.

Attorneys for Seaman and the Duke University defendants weren’t immediately available to comment on the decision.

Lieff, Cabraser, Heimann & Bernstein LLP in San Francisco and Elliot Morgan Parsonage P.A. in Winston-Salem and Charlotte, N.C., are class counsel in the lawsuit. Ellis & Winters LLP in Raleigh, N.C., and Covington & Burling LLP in Washington represent Duke University.

The case is Seaman v. Duke Univ., 2018 BL 34111, M.D.N.C., No. 1:15-cv-462, 2/1/18.

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