DaVita and its outpatient provider competitors allegedly colluded to skew the executive labor market and suppress wages, a former DaVita employee claims in a new lawsuit.
Alberto Peña, a former regional operations director for DaVita, alleged that the dialysis provider and the now-UnitedHealth Group subsidiary Surgical Care Affiliates agreed not to recruit each other’s senior-level employees from 2012 to 2017. There were similar “gentleman’s” agreements between SCA and the Tenet Healthcare Corp. subsidiary United Surgical Partners International from 2010 to 2017 as well as between DaVita and an unnamed third party from 2017 to 2019, Peña claimed in the lawsuit filed in an Illinois federal court Friday.
Peña is seeking class action status for the lawsuit, damages and an injunction that prevents similar “no-poach” agreements. The lawsuit follows last week’s criminal indictment of DaVita and its former CEO Kent Thiry, who was charged with two counts of conspiring with competing employers not to solicit certain employees.
SCA and USPI face similar allegations in another federal lawsuit brought by a former director of information technology at Surgical Care Affiliates. SCA was also named in a January indictment for allegedly conspiring with two unnamed competitors, which Peña alleged were USPI and DaVita.
Tenet and DaVita declined or did not respond to requests for comment on the lawsuit, while Surgical Care Affiliates said that it disagrees with the lawsuit and will defend itself against the unjustified allegations.
“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 UnitedHealth Group subsidiary said in a statement, adding that the lawsuit 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.
The latest lawsuit cites October 2015 emails allegedly from Andrew Hayek, the executive vice president and senior advisor to the CEO of Optum, to a human resources executive at SCA saying, “USPI and DaVita – we can recruit junior people (below director), but our agreement is that we would only speak with senior executives if they have told their boss already that they want to leave and are looking.”
An SCA employee allegedly wrote to a company executive on June 2016 that he thought “there was a gentleman’s agreement between us and (DaVita) re: poaching talent.” An SCA executive replied, “There is. Do you mind if I share with (Andrew Hayek), who has most recently addressed this with (Kent Thiry).”
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 DOJ issued a statement of interest in March 2019 in a high-profile lawsuit involving Duke University Health System and University of North Carolina Health, claiming that these types of restrictions could suppress wages and benefits.