DOJ Loses Two Criminal Antitrust Labor Trials, Stymied by (Lack of) Evidence
The closely watched government campaign to criminally prosecute labor-related antitrust matters has run into a major roadblock—juries.
Last week, the Antitrust Division of the U.S. Department of Justice (“DOJ”) was handed two losses after federal juries in the U.S. District Court for the Eastern District of Texas and the U.S. District Court for the District of Colorado acquitted defendants accused of violating the antitrust laws by fixing wages and conspiring to suppress competition through no-poach agreements, respectively.
On Thursday, April 14, 2022, a Texas jury acquitted Neeraj Jindal and John Rodgers, operators of the physical therapy staffing company Integrity Home Therapy, on charges of price-fixing in violation of the antitrust laws. The DOJ filed the charges—its first criminal wage-fixing case—in December 2020, alleging that Jindal and Rodgers conspired with a competing staffing business to mutually lower rates paid to physical therapists and physical therapy assistants.
At trial, the DOJ brought forth evidenced that Jindal and Rodgers reached out to five competitors suggesting to collectively lower rates and ultimately entered into an agreement with one of the competitors. The defense in contrast argued that there was no agreement with any of the competitors, citing evidence that the sole alleged co-conspirator initially agreed to the scheme but subsequently stated that she never planned to go through with it. The defense also attacked the credibility of co-conspirator, whose court testimony differed from her statements to the Federal Trade Commission (“FTC”) during its earlier investigation.
At the end of the six-day trial, the jury voted to acquit Jindal and Rodgers on the price-fixing count and convicted Jindal of obstructing proceedings before the FTC.
On Friday, April 15, 2022, a Colorado jury acquitted kidney dialysis company DaVita Inc. and its former chief executive officer Kent Thiry on three counts of conspiring with competitors to suppress competition in the market for employees. The DOJ filed the criminal indictment against DaVita and Thiry in July 2021, alleging that Thiry coerced three companies led by DaVita alumni—Surgical Care Affiliates, Radiology Partners, and Hazel Health—to agree not to recruit, or “poach,” any of each other’s senior-level employees. This was the first criminal antitrust charge brought by the DOJ against a company executive for so-called “no-poach” agreements.
DOJ’s trial position was that Thiry set up arrangements with leadership at DaVita’s rivals not to recruit each other’s employees that had the effect of stifling competition and hindering employees’ abilities to progress in their careers. The defense argued there was no evidence that the deals were made in order to end competition and that the rival companies’ executives simply agreed to maintain their relationships with Thiry.
After deliberating for two days, the jury voted to acquit DaVita and Thiry on all counts of conspiring with the rival companies to allegedly suppress competition in the market for employees.
There was one positive takeaway for the DOJ, in that in both cases the court recognized the alleged anticompetitive conduct to be within the scope of the antitrust laws in rejecting the respective motions to dismiss. Since defendants ultimately were acquitted, any appellate review of those rulings will have to wait another case.
But the two losses at trial—in cases selected to be bellwether examples of the DOJ’s goal to criminally prosecute conduct affecting labor markets under the antitrust laws—certainly halts the momentum that the DOJ has been building. While we believe that the government will continue its campaign, they will likely be more careful in selecting their next criminal case going forward; instead, we will probably see DOJ convert some of their pending investigations into civil actions.