Contact: Christian Levis (clevis@lowey.com), 914-733-7220 or Roland St. Louis (rstlouis@lowey.com), 914-733-7231

The Department of Justice’s Antitrust Division (“DOJ”) and the Federal Trade Commission issued joint guidance in October 2016 warning employers that, from that point forward, companies who agree not to hire each other’s employees (called “no poach” or “no hire” agreements) would be subject to criminal prosecution for violating the federal antitrust laws. According to the DOJ, such agreements “eliminate competition in the same irredeemable way as agreements to fix the prices of goods or allocate customers” and “can greatly harm employees and impact earnings over the course of their entire careers.”

The two most prominent civil cases challenging alleged no hire agreements, In re: High-Tech Employee Antitrust Litigation, 11-cv-2509-LHK (N.D. Cal.) and In re Animation Workers Antitrust Litigation, 14-cv-04062-LHK, settled for $435 million and $169 million, respectively. Courts in other no hire cases have determined that agreements among competing firms not to hire each other’s employees are illegal per se, that is, without further inquiry, because they constitute an agreement to allocate markets among horizontal competitors. See, e.g., In re Ry. Indus. Employee No-Poach Antitrust Litig., 395 F. Supp. 3d 464 (W.D. Pa. 2019), AYA Healthcare v. AMN Healthcare, 2018 WL 3032552 (S.D. Cal. June 19, 2018), In re Papa John’s Employee & Franchisee Employee Antitrust Litig., 2019 WL 5386484 (W.D. Ky. Oct. 21, 2019). Courts in these cases have concluded that no hire agreements limit employee compensation and mobility and are virtually indistinguishable from illegal agreements among competitors to allocate customers—a category of restrain long held to violate the antitrust laws.

Some employers in the home healthcare industry appear to have ignored this message. On April 20, 2020, reports revealed that the DOJ’s San Francisco office is running a criminal investigation into an alleged no hire scheme among large home health care companies in which the companies agreed not to hire each other’s employees. This agreement may have suppressed compensation and employee mobility. According to the report, the DOJ issued subpoenas to several home health care companies in October 2019, and one unnamed home health care company has entered the DOJ’s antitrust leniency program. To qualify for the leniency program, the applicant must “report their cartel activity and cooperate in the Division’s investigation of the cartel.”

If you work or have worked in the home health care industry you may have been impacted. Contact Christian Levis (clevis@lowey.com), 914-733-7220 or Roland St. Louis (rstlouis@lowey.com), 914-733-7231 now to lean about your rights.