A federal grand jury has indicted dialysis provider DaVita and its former CEO on two counts of conspiring with competing employers not to solicit certain employees.
The indictment alleges that DaVita and former CEO Kent Thiry participated in two separate conspiracies to suppress competition for certain executives. The charges are the result of an ongoing investigation by the U.S. Justice Department’s antitrust division and the Federal Bureau of Investigation into employee allocation agreements in the healthcare industry.
The first count holds that DaVita and Thiry conspired with Surgical Care Affiliates to not solicit one another’s senior-level employees from as early as February 2012 until as late as July 2017. Count two alleges DaVita and Thiry conspired with another healthcare company from as early as April 2017 until as late as June 2019 to allocate employees by agreeing that the other company would not solicit DaVita’s employees.
“These charges show a disturbing pattern of behavior among health care company executives to conspire to limit the opportunities of workers,” Steven D’Antuono, assistant director in charge with the FBI’s Washington field office, said in a statement. “The FBI is dedicated to working with our partners to hold those accountable who would engage in labor market collusion to the detriment of their employees.”
DaVita, which drew about $11.6 billion in revenue in 2020, said in a statement that the charges against the company are “unjust and unwarranted.”
“The government’s case relies on an unprecedented and untested application of the antitrust laws to alleged discussions involving a former executive that occurred many years ago,” the statement said. “We will vigorously defend the company against this unjustified action. The evidence will demonstrate the government has chosen to unjustly attack our reputation.”
Karen Crummy, spokesperson for Kent Thiry, said in a statement that the DOJ’s allegations are false and rely on a radical legal theory about senior executive recruitment without precedent in U.S. history.
“The government took steps to ignore—and even hide—key evidence,” Crummy said. “The facts bear it out decisively: No antitrust violations occurred, these companies hired DaVita executives for years, and the companies are not competitors.”
The government charged DaVita’s alleged co-conspirator, Surgical Care Associates, in January. That case is pending in the Northern District of Texas.
DaVita and Thiry are charged with two counts of violating the federal Sherman Antitrust Act. If convicted, DaVita faces a maximum penalty of $100 million per count, and Thiry faces a maximum penalty of 10 years in prison and a $1 million fine per count. The government said the maximum fine could be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum.
DaVita and Thiry are scheduled to make their initial court appearances July 20 before U.S. Magistrate Judge Kristen Mix of the U.S. District Court for the District of Colorado.
“Those who conspire to deprive workers of free-market opportunities and mobility are committing serious crimes that we will prosecute to the full extent of the law,” Acting Assistant Attorney General Richard Powers said in a statement. “We are grateful for our partnership with the FBI and our shared commitment to rooting out illegal collusion targeting labor markets.”
Thiry stepped down as CEO in 2019 after serving in the position since 1999. He was replaced by current CEO Javier Rodriguez, who formerly headed up DaVita Kidney Care, the company’s largest business segment. UnitedHealth Group’s Optum subsidiary bought DaVita’s other segment, DaVita Medical Group, for $4.3 billion in 2019.