An Illinois federal judge is considering whether to certify a class of former senior-level healthcare workers in their claim that no-poach agreements among various providers resulted in their being paid lower wages. The healthcare providers at issue include DaVita, UnitedHealth Group’s Surgical Care Affiliates (SCA), and United Surgical Partners International (USPI), the ambulatory surgery arm of Tenet Healthcare Corp. The case is In re: Outpatient Medical Center Employee Antitrust Litigation, Case Number 1:21-cv 00305, U.S. District Court for the Northern District of Illinois.
The two no-poach agreements at issue in this case prevented SCA and DaVita, as well as SCA and USPI, from recruiting each other’s senior employees. The agreements also required employees to advise their supervisors before applying for jobs at the other companies. According to the workers, the companies also shared confidential wage data, including future raises, which caused the suppression of their wages.
During a recent hearing on the request for class certification, the plaintiffs pointed to four other cases in which a court granted class certification in a no-poach case outside the franchise context. However, U.S. District Judge Sunil R. Harjani noted that those cases involved a group of plaintiffs with more common interests. In contrast, this case involves workers from various sectors, with more diverse interests. Harjani further questioned how to evaluate the commonality of those interests and the effects of the allegedly illegal conduct without first identifying a market definition. Finally, Harjani wondered if class certification was appropriate in a case involving two separate no-poach agreements, with SCA as the only factor linking them.
In response, the plaintiffs’ attorneys argued that pay data for every member of the proposed class shows a decrease in pay after the alleged conspiracy by the defendants. When the companies shared pay data, they collectively suppressed the wages of employees of all companies involved. They also pointed to a no-poach class action in a California federal court involving over 60,000 workers in various tech positions, all subject to the same pay structure.
The companies’ defense attorneys pointed out the lack of evidence of any communication between USPI and DaVita. The defense also argued that the lack of a market definition and the existence of two separate agreements should result in denial of class certification, as the proposed class was too diverse. Furthermore, the defense distinguished the no-poach class action cases cited by the plaintiffs in that they all involved dominant employers in narrow geographical areas, so they didn’t need to address obvious market power. According to the defense, a common compensation structure cannot cure the proposed class’s disqualifying diversity.
Ultimately, the judge took the issue of class certification under advisement. The former workers sued SCA in an Illinois federal district in 2011 seeking to certify a class of all senior-level employees affected by the no-poach agreements. They claimed that the agreements reduced not only their individual wages but also competition in violation of federal antitrust laws. Soon thereafter, a federal grand jury in Colorado indicted DaVita and its former CEO on criminal charges related to other no-agreement conspiracies with competing companies. Nonetheless, a jury acquitted DaVita and the former CEO of all charges in April 2022, signaling a major loss for the U.S. Department of Justice, which then dropped its no-poach case against SCA.
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