UnitedHealth Group subsidiary indicted for alleged ‘no-poach’ agreements

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A UnitedHealth Group subsidiary was indicted on charges that it conspired with rivals to not poach each other’s senior-level employees. Deerfield, Ill.-based Surgical Care Affiliates, which owns or operates more than 230 ambulatory surgery centers and surgical hospitals across the country, allegedly had so-called “no-poach” agreements with two other unnamed competitors, according to a criminal indictment filed Wednesday in a Texas federal court. SCA, which UnitedHealth’s Optum health services division acquired in 2017, was charged with two counts of conspiracy in restraint of trade to allocate employees over the alleged seven-year scheme spanning May 2010 to October 2017. SCA said in a statement that it disagrees with the government’s position and it will defend itself against the “unjustified allegations.””The position taken by the government in this matter represents a novel application of the antitrust laws as they relate to employee recruitment, for which there is no precedent or foundation,” the organization said. “This matter involves alleged conduct seven years before UnitedHealth Group acquired SCA and does not involve any SCA ambulatory surgery centers, their joint owners, physician partners, current leadership or any other UnitedHealth Group companies.”SCA and its competitors would turn away otherwise qualified candidates, according to the indictment. In one case, a senior human resources official at an SCA competitor wrote in an email to a recruiter “not to schedule a call w/ [candidate], thanks. She would have to apply for the job first. We cannot reach out to SCA folks. Take any SCA folks off the list.” Another email from an SCA executive reads, “Putting two companies in italics ([Company A] and [Company B]) – we can recruit junior people (below Director), but our agreement is that we would only speak with senior executives if they had told their boss already that they want to leave and are looking.”The Justice Department’s Antitrust Division and the Federal Trade Commission issued guidance for no-poach agreements in October 2016, indicating that they plan to pursue these cases criminally. No-poach agreements “eliminate competition in the same irredeemable way as agreements to fix product prices or allocate customers, which have traditionally been criminally investigated and prosecuted as hardcore cartel conduct,” according to the guidance.The Justice Department issued a statement of interest in March 2019 in a high-profile class-action suit involving Duke University Health System and University of North Carolina Health, claiming that these types of restrictions could suppress wages and benefits.

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