Two labor organizations, SEIU Healthcare Pennsylvania (SEIU) and the Strategic Organizing Center (SOC), have lodged a public complaint with the Department of Justice (DOJ) alleging that the University of Pittsburgh Medical Center (UPMC) has wrongfully exercised its power as the largest private sector employer in Pennsylvania to “suppress workers’ wages and benefits, drastically increase their workloads, and prevent workers from exiting or improving these working conditions through a draconian system of mobility restrictions and widespread labor law violations that lock in sub-competitive pay and working conditions.” The 55-page complaint requests that the DOJ investigate and take action to halt the alleged conduct.
The complaint alleges that UPMC has pursued a series of mergers and subsequent reductions in capacity that have harmed competition in certain Pennsylvania labor and healthcare markets in violation of Section 2 of the Sherman Act. The complaint alleges that UPMC’s conduct prevents competition in labor and healthcare markets, resulting in the provision of lower quality healthcare services to consumers and poorer working conditions for UPMC employees. With respect to working conditions, the complaint cites to a wage study correlating increases in UPMC market share to decreases in wages of UPMC workers – specifically that wages at UPMC fell 30 to 57 cents per hour for every 10% increase in UPMC market share. It further alleges that UPMC maintains and enforces sub-competitive conditions by, among other things:
- Imposing noncompete restrictions on doctors it employs, thus preventing employees from exiting UPMC jobs;
- Refusing to rehire workers who quit, which the complaint posits is a generally well-known practice that discourages employees from leaving their positions; and
- Engaging in widespread violations of labor law rights, thus preventing employees from asserting bargaining power that might act as a restraint on UPMC’s power.
It remains to be seen whether the DOJ will formally investigate the allegations, but the complaint raises issues that appear to be of central focus for the DOJ currently: restrictions on worker mobility and mergers in the healthcare industry. See our previous posts regarding DOJ antitrust enforcement actions in the labor space here and here. Our antitrust colleagues also covered the DOJ’s recent withdraw of three longstanding health care antitrust enforcement guidance documents, including merger guidance, in light of considerable changes in the healthcare industry since their issuance.
The complaint comes at a time when healthcare employers across the nation are facing staffing shortages and challenges related to worker burnout, recruitment, and retention. Healthcare systems are also seeing increases in worker strikes and organizing efforts since the COIVD-19 pandemic. The antitrust complaint against UPMC lodged with the DOJ by SEIU and SOC illustrates that employers that are dominant in a particular labor market need to anticipate potential antitrust claims by labor organizations seeking to secure more benefits and better working conditions for their members.
Ballard Spahr’s Labor and Employment and Antitrust Groups are prepared to answer questions and provide solutions 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 must take to remain in compliance with applicable law.