Geisinger, Evangelical Community No-Poach Agreement Class Action

This class action takes issue with a no-poach agreement allegedly made between Geisinger Health and Evangelical Community Hospital in central Pennsylvania. The complaint alleges that the no-poach agreement reduced competition for healthcare workers in the area and suppressed mobility and wages in that market.

The class for this action is all natural persons who worked at Geisinger Health or Evangelical Community Hospital as healthcare workers between May 2015 and the time the anticompetitive conduct stops.

The complaint quotes guidance issued in September 2019 by the Department of Justice’s (DOJ’s) Antitrust Division: “When companies agree not to hire or recruit one another’s employees, they are agreeing not to compete for those employees’ labor…. Under the antitrust laws, the same rules apply when employers compete for talent in labor markets as when they compete to sell goods and services.”

The complaint claims that the agreement was made “at the highest levels of their organizations, through secret verbal exchanges that were later confirmed by e[-]mails…” It claims they also agreed to keep the agreement secret from their employees—who were most affected by them—and from the general public.

The complaint alleges that the agreement began in May 2015, and possibly earlier, and that it covered doctors, nurses, psychologists, and other professionals. It continued at least until August 5, 2020, when the DOJ brought a civil antitrust action to stop Geisinger from acquiring part of Evangelical.

According to the complaint, the DOJ’s objections included that the acquistion “would fundamentally reduce competition for healthcare services and raise the likelihood of continued unlawful coordination between” the two. The DOJ claimed that the companies had a record of “picking and choosing when to compete with each other” and cited the no-poach agreement between the companies’ senior executives.

Although the companies’ websites advertise “competitive” compensation packages, the complaint alleges that this is not true since they declined to compete with each other. The usual result of this is less-than-competitive wages.

The complaint alleges that the companies monitored compliance with the agreement and, when violations were found, asked the other company to stop the competitive behavior.

According to the complaint, it was the DOJ’s investigation of the proposed acquisition and its publication of the resulting DOJ complaint that revealed the existence of the no-poach agreement.

The complaint alleges, “The No-Poach Agreement is a per se unlawful restraint of trade under federal antitrust laws” and also violates Pennsylvania’s state laws.

Article Type: Lawsuit
Topic: Antitrust
Tags: Antitrust, No-Poach Agreements