Criminal antitrust labor case survives health managers' bid to dismiss

A general view of the Department of Justice building in Washington, U.S., April 18, 2019. REUTERS/Amr Alfiky
  • U.S. judge's ruling latest to address novel prosecution
  • DOJ saw trial setbacks in Texas and Colorado labor antitrust cases

(Reuters) - A Maine federal judge on Monday refused to dismiss criminal antitrust charges alleging four business managers of home healthcare agencies conspired to restrict workers' pay and job mobility, notching a win for the U.S. Justice Department in a closely watched prosecution.

U.S. District Judge John Woodcock Jr's ruling means the Justice Department can head to trial next month in Portland federal court, marking the latest in a series of cases that have tested the reach of criminal antitrust provisions to labor and employment practices.

Woodcock wrote in his order that the indictment, filed in January, "plausibly alleges a per se illegal conspiracy to fix wages and allocate employees." The four defendants, he wrote, will have a chance to challenge whether there was an agreement and to argue their conduct had a pro-competitive purpose.

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Lawyers for the defendants did not immediately return messages seeking comment on Tuesday. A Justice Department spokesman also did not immediately return a message seeking comment.

Defense lawyers told the court that none of the defendants ever fixed any wages or followed a "no poach" rule.

Prosecutors have alleged the indicted business managers unlawfully coordinated in 2020 to try to eliminate competition for personal support specialist workers. The government pointed to text messages among defendants to bolster the allegation of a conspiracy to artificially keep wages at a certain level.

"Price-fixing has been per se illegal for over a century. And wage-fixing specifically has been understood to be price-fixing for nearly as long," the government's lawyers told Woodcock in a June court filing.

Although the DOJ has won novel orders keeping labor-focused criminal antitrust cases on track, it has suffered trial setbacks.

A Texas federal judge in November 2021 declined to dismiss a novel criminal antitrust wage-fixing case, but jurors ruled against the competition law claims at trial in April.

In January, a Colorado federal judge refused to throw out a prosecution alleging a criminal antitrust conspiracy to restrict employee mobility. The government charged dialysis provider DaVita Inc and a former chief executive officer, but both defendants prevailed at trial in April in Colorado.

In the Maine case, Woodcock said the "defendants' alleged agreement to engage in horizontal price-fixing and market-allocation falls within the category of restraints long condemned as inherently anticompetitive."

The trial is scheduled to start on Sept. 6.

The case is United States v. Manahe U.S. District Court for the District of Maine, No. 2:22-cr-00013.

For the United States: Philip Andriole and Nolan Mayther of the Department of Justice

For defendants: Thomas Marjerison of Norman, Hanson & DeTroy; Jonathan Goodman of Troubh Heisler; Neale Duffett of Cloutier, Conley & Duffett; and Bruce Merrill

Read more:

DOJ defends rare wage-fixing criminal case in Maine federal court

After DOJ antitrust losses in employment trials, defense lawyers urge 'rethink'

First DOJ criminal wage-fixing antitrust case survives challenge

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