Federal Indictment of Home Health Care Managers Highlights Antitrust Enforcers’ Increased Focus On Labor Markets
Antitrust enforcers’ growing interest in labor markets received further confirmation last week with a federal grand jury’s indictment charging four managers of home health care agencies with participating in an alleged conspiracy to suppress the wages and restrict the job mobility of essential workers during the COVID-19 pandemic.
The indictment follows on the heels of a statement by Assistant Attorney General Jonathan Kanter, the head of the Antitrust Division of the U.S. Department of Justice (“DOJ”), specifically targeting excessive concentration and abuses by employers in labor markets. In remarks to the New York State Bar Association’s Antitrust Section on January 24, 2022, AAG Kanter stated that “[t]he monopsony power of employers in labor markets tends to depress wages, erode quality of life, and make it harder for workers to switch jobs.”
The antitrust chief’s calling out of labor markets should come as no surprise. Federal and state antitrust enforcers have focused on anticompetitive conduct in labor markets in recent years, leading this blog to identify it as one of six “Antitrust Developments to Watch in 2022.”
Days after AAG Kanter’s speech, he signed the indictment alleging that four managers of home health care agencies engaged in a conspiracy to restrain trade in the labor market for Personal Support Specialist (“PSS”) workers in and around Portland, Maine. The indictment alleges that the four managers “and their co-conspirators . . . entered into and engaged in a combination and conspiracy to suppress and eliminate competition for the services of PSS workers by agreeing to fix the rates paid to PSS workers and by agreeing not to hire each other’s PSS workers.” Indictment ¶¶ 5-8, 15. The indictment alleges a “per se” violation of Section 1 of the Sherman Act. Id. ¶ 15.
The indictment contains more specific charges, including allegations that the defendants and their co-conspirators:
- “participated in conversations and communications regarding MaineCare’s rate increases,” including communications “using an encrypted messaging app”;
- attended “virtual” and “in-person meetings” and “engaged in discussions regarding collectively fixing the hourly rates for PSS workers and refraining from hiring each other’s PSS workers”;
- “exchanged a series of group messages agreeing to fix rates at $15 per hour for PSS workers without a certification from the State of Maine and $16 per hour for PSS workers with a certification from the State of Maine” – the indictment includes the following quotations from “group messages”:
- “Brothers, everyone has agreed that the rate is from 15-16”
- “[W]e have agreed on 15 and 16 and I started announcing it”
- “I am committed and told the employees 15-16”
- “Yes, this is the agreement [. . . ] I am still going with 15 and 16”; and
- “agreed to pressure other home health care agencies to refrain from competing for PSS workers.”
Id. ¶ 17.
The DOJ’s press release suggests the enforcers may be engaged in a broader investigation: “The charges are the result of an ongoing federal antitrust investigation into wage fixing and worker allocation in the home health care industry, conducted by the Antitrust Division’s New York Office, the U.S. Attorney’s Office for the District of Maine, and the FBI’s Boston Division, Portland Resident Agency.” In other words, there may be more to come.
As the DOJ’s press release rightly notes, “An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.” Nevertheless, this recent indictment serves as another example of increased scrutiny by antitrust enforcers of labor markets.
HR professionals, recruiters, executives, and others should remain mindful of the antitrust laws, particularly when communicating outside the company about labor, wages, or other employment issues. Workers should also remain mindful of their rights, including the right to bring individual or class action antitrust lawsuits, to remedy anticompetitive conduct in labor markets that can, to quote AAG Kanter, “depress wages, erode quality of life, and make it harder for workers to switch jobs.”
Written by Daniel Vitelli
Edited by Gary J. Malone