In December, the Department of Justice's (DOJ) Antitrust Division announced its first criminal charges for wage fixing, highlighting the Antitrust Division's increased focus on unfair competition in the human resources (HR) sector. A federal grand jury indicted the former owner of a health care staffing company for allegedly conspiring with competing health care staffing companies to lower the rates paid to physical therapists and physical therapy assistants in Texas. The former staffing company owner also was charged with obstruction of justice for allegedly making false and misleading information during the government's investigation. As a result of the antitrust charges, the former staffing company executive faces up to 10 years in prison and a $1 million fine. The executive also faces an additional five years in prison and a $250,000 fine for the obstruction charges.

The Antitrust Division has warned for many years that it would criminally investigate allegations of wage fixing and so-called "no poach" agreements. In 2016, the Antitrust Division issued Antitrust Guidance for HR Professionals to assist professionals in the human resources sector to avoid running afoul of antitrust laws. According to the Guidance, "[a]n agreement among competing employers to limit or fix the terms of employment for potential hires may violate the antitrust laws if the agreement constrains individual firm decisionmaking with regard to wages, salaries, or benefits; terms of employment; or even job opportunities." The Guidance warned that the Antitrust Division would criminally investigate, and potentially prosecute, allegations of employers agreeing among themselves to set employee compensation or not to hire each other's employees. However, the Antitrust Division has not, until now, brought criminal against a company or individual for labor-related antitrust violations.

The Antitrust Division's first criminal indictment for wage fixing demonstrates the gravity with which the Division views anti-competitive conduct in the HR sector. Companies and HR professionals should take heed that improper discussions or agreements with competing employers seeking to hire the same employees could expose them to criminal charges. To avoid inadvertently engaging in such conduct, companies should carefully examine their antitrust compliance programs to ensure they are structured to effectively prevent and detect antitrust violations, including in the HR sector. The need for an effective compliance program is especially acute in light of the Antitrust Division's new antitrust compliance policy, which for the first time allows the Antitrust Division to consider the effectiveness of a company's compliance program when deciding whether to bring criminal charges. Implementing a robust compliance program that is tailored to the risks of the HR sector is the most effective way to head off a potential antitrust violation and ultimately demonstrate compliance in the event of a DOJ investigation or criminal prosecution.

For more information, please contact:

Lauren E. Briggerman, lbriggerman@milchev.com, 202-626-5966

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