On October 27, 2022, VDA OC, LLC, (VDA) a Nevada health care staffing company, pleaded guilty to participating in a conspiracy to suppress and eliminate competition for the services of school nurses. According to the plea, VDA and an unnamed competitor agreed not to recruit or hire each other’s nurses and to refrain from raising wages of the nurses. The United States District Court for the District of Nevada sentenced VDA to pay $134,000, consisting of a $62,000 criminal fine and $72,000 in restitution to nurses impacted by the agreement. The criminal fine represents a percentage of VDA’s volume of commerce during the approximately 9 months the agreement was in place. Federal sentencing guidelines provide for a base fine of 20 percent of affected commerce that can be adjusted based on a number of sentencing factors and can be substantial.
This is the DOJ’s first successful criminal prosecution in a labor-focused antitrust case. In 2016, in a joint statement with the Federal Trade Commission, the DOJ announced its intent to criminally prosecute agreements between employers not to poach each other’s employees (no-poach agreements) or fix wages as per se violations of the Sherman Antitrust Act. Prior to that announcement, such agreements were the subject of civil enforcement actions, if at all, which carry no risk of prison time for individuals. As we previously reported here, the DOJ’s first two criminal no-poach trials ended in acquittals of any antitrust crimes for the indicted companies and individuals.
Despite those acquittals, the DOJ has appeared undeterred in investigating no-poach and wage fixing agreements, and the result in this case may well further embolden its criminal enforcement in the labor space. Ballard Spahr’s Antitrust and Labor and Employment Groups are prepared to answer questions regarding antitrust issues in the context of the labor market. Please contact us if we can assist you in understanding your company’s legal requirements and the measures your business should take to remain in compliance with applicable law.