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The Department of Justice Has Cooked Up Criminal Charges for No-Poach Agreements

Here’s yet another reason not to enter agreements with other companies not to hire (poach) other companies’ employees: potential criminal prosecution.  In the first-ever criminal trial for labor-related antitrust (Sherman Act) violations, the Department of Justice alleges that former DaVita Inc. CEO Kent Thiry conspired with other healthcare CEOs to limit employee movement to competitors. As of this writing, the federal jury is deliberating. The trial was eight days long.

Prosecutors allege that Thiry and DaVita entered “no-poach” agreements with Surgical Care Affiliates LLC, Radiology Partners, and Hazel Health Inc. not to solicit each other’s executives or to ask the executives to tell their bosses before applying for a job with one of the three companies.  If so, prosecutors argued that this arrangement had a “chilling effect” on commerce by keeping wages down in the companies’ market. The defendants have admitted that such an agreement existed – but that it had no such effect on business.

The DOJ and workers have already brought many civil suits claiming that no-poach agreements adversely affected markets.  Apple, Google, Adobe, Pixar, Intel, Intuit, Lucasfilm, McDonald’s, and Jimmy John’s are among those that have been sued.

Before entering agreements with other companies regarding employees, involve your friendly neighborhood employment lawyer.

For over 25 years, Katherine has provided her clients with robust representation in matters of employment and related business law. Katherine represents and counsels employers and executives in all facets of the employment relationship, including hiring, termination, discrimination, non-competition, Fair Labor Standards Act matters, issues regarding Family and Medical Leave and other leaves, whistleblowers’ complaints, and regulatory matters.  As a litigator, she is well aware of the nuances of law necessary to draft effective restrictive covenants, severance agreements, and employment contracts.  Along with her over 250 colleagues, she represents companies and non-profit organizations of all sizes. She has defended companies under investigation by both U.S. and state Departments of Labor and handled multiple matters before the EEOC.

Offit Kurman, one of the fastest-growing, full-service law firms in the United States, serves dynamic businesses, individuals and families. With 17 offices and nearly 250 lawyers who counsel clients across more than 30 areas of practice, Offit Kurman helps maximize and protect business value and personal wealth by providing innovative and entrepreneurial counsel that focuses on clients’ business objectives, interests and goals. The firm is distinguished by the quality, breadth and global reach of its legal services and a unique operational structure that encourages a culture of collaboration. For more information, visit www.offitkurman.com.

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Author: Katherine Witherspoon Fry, Esq.
Articles have been Reprinted with permission from the charlotte observer and Mike Hunter.

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