Justice Dept. to Pursue Healthcare ‘No-Poach’ Cases, Official Says

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By Victoria Graham

The Justice Department is conducting investigations in the healthcare sector in which employers agree among themselves not to hire employees from competitors, DOJ Deputy Assistant Attorney General Bernard Nigro said May 17.Nigro’s comments during the American Bar Association’s antitrust in healthcare conference in Arlington, Va. builds on the DOJ’s broader effort to tamp down on unlawful “no-poach” agreements, which the Justice Department says can depress salaries and stifle competition.

“Antitrust enforcement will continue to play an outsized role in the healthcare industry,” he said.

In April, the DOJ announced its first no-poach charges against rail equipment companies Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp. (Wabtec). High level executives at both companies established agreements promising not to poach each others’ employees, which restrained competition for employees and deprived works of benefits, the DOJ said.

Going forward, DOJ Assistant Attorney General Makan Delrahim said the antitrust division will pursue criminal charges in no-poach cases when warranted. In the case of Knorr-Bremse and Wabtec, the matter was pursued civilly.

Private Matters

The issue is being addressed by private plaintiffs as well. A class action is pending in the U.S. District Court for the Middle District of North Carolina involving a radiologist at Duke University who claims a no-poach agreement between Duke and the University of North Carolina at Chapel Hill prevented her from making a lateral move.

In February, Judge Catherine Eagles certified a class of persons employed from 2012 to the present who were faculty members of either UNC or Duke, all of whom may have been impacted by the alleged no-poach agreement. The case was originally filed in 2015.

Similarly, workers of Knorr-Bremese and Wabtec filed a civil suit against both rail companies after the DOJ announced it’s case. Workers are attempting to collect wages that were lost or depressed due to the no-poach agreement between both employers.

To contact the reporter on this story: Victoria Graham in Washington at vgraham@bloomberglaw.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com

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