DaVita and former CEO Kent Thiry indicted in healthcare hiring conspiracy 

Photo: Hirkophoto/Getty Images

Outpatient medical care center operator DaVita and its former CEO, Kent Thiry, were indicted by a federal grand jury in Denver on charges of conspiring with competing employers in no-poach agreements, according to the Department of Justice.

The first part of the two-count indictment alleges DaVita, along with co-conspirator Surgical Care Affiliates and its related entity, illegally agreed not to solicit each other's senior-level employees from as early as February 2012 until as late as July 2017.

The second count alleges DaVita and Thiry conspired with another healthcare company to refrain from soliciting DaVita's employees, the so-called "no poach" theory, beginning as early as April 2017 until as late as June 2019.

Both counts allege that DaVita, Thiry and UnitedHealth Group subsidiary SCA, which was indicted separately in January, violated the Sherman Act.

DaVita faces a maximum penalty of a $100 million fine per count if convicted, while Thiry personally could face a maximum penalty of 10 years in prison and a $1 million fine per count.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty.

Thiry, through spokesperson Karen Crummy, denied the allegations.

"Kent Thiry has worked for decades to provide affordable, life-saving health care to millions of Americans. He has dedicated the last 10 years to making Colorado a better place for everyone, and he has done it the right way: ethically, lawfully and with integrity," Crummy said in a statement. 

"These allegations are false and rely on a radical legal theory about senior executive recruitment without precedent in U.S. history. The government took steps to ignore – and even hide – key evidence. The facts bear it out decisively: No antitrust violations occurred, these companies hired DaVita executives for years, and the companies are not competitors."

Also, Crummy said, the U.S. Chamber of Commerce filed a friend of the court brief in a related case against SCA, asking the court for dismissal.

"Businesses, employees, and consumers alike need certainty to structure their conduct and affairs. Part of this certainty is knowing what conduct can lead to criminal prosecution. Allowing the [Department of Justice] to retroactively criminalize behavior strikes at the heart of the ordered liberty guaranteed to all Americans," the chamber said.

WHY THIS MATTERS

The charges indicate a "disturbing pattern of behavior" by healthcare company executives who seek to limit the opportunities of workers through labor market collusion, said Assistant Director in Charge Steven M. D'Antuono, of the FBI's Washington Field Office, by statement.

A violation of the Sherman Act carries a maximum penalty of a $100 million fine for corporations. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum, according to the DOJ.

THE LARGER TREND

The indictment is part of an ongoing investigation of labor market collusion in the healthcare industry led by the Justice Department's Antitrust Division, in partnership with the FBI.

Jeffrey Jacobovitz, a former Federal Trade Commission attorney and currently the vice-chair of the ABA Antitrust Section's Compliance and Ethics Committee noted in a blog post in January that investigations related to this type of conduct would likely increase under the Biden Administration.

He pointed out similar anticompetitive hiring cases involving the healthcare industry. United States v. Neeraj Jindal and the SCA case were indicative of the government's evolving approach to evaluating what constitutes criminal anticompetitive conduct.

ON THE RECORD 

"Those who conspire to deprive workers of free-market opportunities and mobility are committing serious crimes that we will prosecute to the full extent of the law," said Acting Assistant Attorney General Richard A. Powers of the Justice Department's Antitrust Division in a statement. "We are grateful for our partnership with the FBI and our shared commitment to rooting out illegal collusion targeting labor markets."

Twitter: @dropdeaded209 
Email the writer: nathaneddy@gmail.com