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Despite back-to-back losses in the Department of Justice’s (DOJ) first-ever criminal no-poach and wage-fixing cases, the Antitrust Division (the Division) is not backing down from its enforcement focus on labor. In fact, the Division and Assistant Attorney General Jonathan Kanter continue to proudly tout their continued aggressive stance, with Kanter recently stating that the Division is going to “continue to bring cases” and “will not back down.” 



After both historic trials resulted in total acquittals, Kanter attempted to recast the losses as precedent-setting victories for the Division, “which were extremely important cases establishing that harm to workers is antitrust harm […] survived motions to dismiss.” The reality that motions to dismiss are so rarely granted in criminal cases undercuts the practical significance for many who regularly litigate criminal cases. 



In the first-ever criminal wage-fixing case, the former owner of DaVita, a health care staffing company, and the company’s former clinical director were indicted for allegedly colluding with a competitor to decrease employee pay. The court denied the defendants’ motion to dismiss last fall, when it held that since wage fixing was akin to price fixing, it warranted per sescrutiny of the conduct rather than the more lenient rule-of-reason analysis. This ruling was not surprising to many observers. After a six-day trial, both defendants were acquitted.



Likewise, the DaVita defendants did not succeed on their motion to dismiss, with the judge finding that the government could proceed under a per se theory of liability for what was alleged to be a naked no-poach agreement. However, the defendants did score some meaningful pretrial wins, which undercut the force of the per se motion to dismiss ruling. First, Judge R. Brooke Jackson agreed to instruct the jury that the government had to prove as part of its case that the defendants entered into the conspiracy “with the purpose of allocating the market.” Next, the court allowed the defendants to introduce “evidence of salary increases and other beneficial effects,” since that evidence “might plausibly show an alternative purpose of the agreement” – i.e., procompetitive justifications for the arrangement.



At trial, the defense admitted that the defendants had entered into agreements with competitors to not hire DaVita’s executives. However, it argued that the purpose was not to allocate the market and that there were procompetitive justifications and effects to these arrangements. The defense also argued that the number and size of the companies involved were too small to meaningfully diminish competition. After a two-day deliberation, the jury acquitted both defendants on all counts.



In December, the Division indicted the first individuals under a no-poach conspiracy that occurred outside the health care field when it returned an indictment charging executives in the aerospace outsource engineering industry. The defendants recently moved to dismiss the indictment, arguing that the case should not be subject to per se scrutiny, particularly given the customer-supplier nature of the relationships between the defendants. The Division has opposed the motion and oral argument is set for October.  



Most recently, though it’s likely not the last such case, in January, the Division announced wage-fixing and labor market allocation charges against four managers of home health care agencies in Maine for allegedly conspiring to suppress wages and restrict workforce mobility of essential workers during the COVID-19 pandemic. Again, given the government favoring standards in place for a criminal motion to dismiss, the Division won, with the judge determining that per sescrutiny was appropriate, but again alluding to adding an intent to allocate element and allowing the defense to put on rule-of-reason type evidence. 



The Division’s recent no-poach and wage-fixing persistence and public statements indicate that it is not backing down on its quest to use its criminal powers to attempt to root out what it views as misconduct in the “labor market.” Ultimately, juries and judges will have the last word on the Division’s success in this area.

DOJ Antitrust Division Not Backing Down on Labor

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