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October 31, 2022
On October 27, 2022, VDA OC LLC (“VDA”) pleaded responsible to partaking in a conspiracy with one other healthcare staffing firm to allocate worker nurses and repair their wages in violation of Part 1 of the Sherman Act.[1] The case marks the primary profitable prison prosecution for a labor market antitrust violation, following two vital losses for the U.S. Division of Justice (“DOJ”) earlier this yr with acquittals in United States v. DaVita, Inc., No. 1:21-cr-00229 (D. Colo.), and United States v. Jindal, No. 4:20-cr-00358 (E.D. Tex.).
VDA emphasised the “extraordinarily restricted nature of the [conspiratorial] settlement” in a press release.[2] Based on the indictment, VDA entered right into a nine-month settlement to not recruit nurses from a competitor within the Clark County College District in Nevada (“CCSD”) or to lift college nurses’ wages.[3] The settlement started in or round October 2016, when VDA’s former Regional Supervisor Ryan Hee despatched an electronic mail to the chief of an unnamed competitor saying, “[p]er our dialog, we is not going to recruit any of your energetic CCSD nurses” and “[i]f anybody threatens us for extra money, we’ll inform them to kick rocks!”[4] The competitor’s govt responded, “[a]greed on our finish as nicely. I’m glad we are able to work collectively via this, and guarantee that we’ll not let the sector workers run our companies shifting ahead.”[5] The settlement allegedly resulted in or round July 2017.[6]
VDA was sentenced to pay a prison high quality of $62,000 and restitution of $72,000 to the affected nurses.[7] Underneath the U.S. Sentencing Tips (“USSG”), antitrust high quality ranges are calculated by first figuring out the “base high quality,” which is 20% of the “affected quantity of commerce.”[8] The DOJ has not beforehand addressed the best way to measure the affected quantity of commerce in labor market instances, however this case confirms the prevailing assumption that the DOJ will search to calculate the amount of commerce utilizing the compensation paid to the defendant’s affected workers at some stage in the alleged conduct. The amount of commerce attributed to VDA was $218,016 primarily based on payroll data for the wages paid to affected nurses in the course of the interval of the conspiracy.[9] The ensuing base high quality was $43,603, which is adjusted for culpability below the united states, yielding a advisable high quality vary between $52,324 to $104,647.[10]
The DOJ possible agreed to suggest a high quality close to the decrease finish of the united states high quality vary due to the comparatively excessive quantity of restitution that VDA agreed to pay. The $72,000 restitution displays almost a 3rd of the agreed-upon quantity of commerce, which is far larger than the settlement charges in prior no-poach civil instances.[11] VDA’s decision is silent about how the DOJ recognized the affected nurses or how the restitution fee might be distributed, though the methodology that the DOJ adopts might be of great curiosity to events in future instances.
VDA’s willingness to pay such beneficiant restitution, in change for a decrease prison high quality, could replicate its personal curiosity in a settlement skewed towards compensating alleged victims to cut back the chance of follow-on civil litigation. Certainly, the DOJ famous in its sentencing memorandum that VDA’s restitution fee would doubtlessly obviate the necessity for nurses to convey parallel civil fits to get better damages.[12] This can be a promising pathway for the DOJ to incentivize firms to enter plea agreements that deserves additional consideration. Firms now face years of expensive and burdensome civil litigation following many prison antitrust investigations and should contemplate whether or not a decision with the DOJ will prejudice its skill to defend these instances. If the DOJ is keen to barter affordable restitution quantities in plea agreements and advocate in courtroom that its agreed-upon restitution funds absolutely compensate the allegedly harmed workers, it might considerably scale back the chance of follow-on personal litigation. This incentive might also lengthen to leniency recipients below the Antitrust Division’s Company Leniency Coverage, which was lately up to date to require that “candidates should current concrete, moderately achievable plans” for paying restitution to injured events.[13]
The DOJ’s case stays ongoing in opposition to VDA’s former Regional Supervisor, Ryan Hee. Hee has pleaded not responsible and is at the moment scheduled for trial in April 2023.
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[1] Plea Settlement at ¶ 2-3, United States v. VDA OC, LLC, No. 2:21-cr-00098 (D. Nev. Oct. 27, 2022).
[2] See Dan Papscun, DOJ Notches First No-Poach Win With Staffing Agency’s Sentencing (Oct. 27, 2022, 2:23 PM), Bloomberg Information, https://information.bloomberglaw.com/in-house-counsel/doj-notches-first-no-poach-win-with-guilty-plea-sentencing?utm_source=rss&utm_medium=CCNW&utm_campaign=00000184-1a94-d054-af8e-5bb56feb0001.
[3] See Indictment at ¶ 12-14, United States v. VDA OC, LLC, No. 2:21-cr-00098 (D. Nev. March 26, 2021).
[4] Id. at ¶ 14.
[5] Id.
[6] See id. at ¶ 12.
[7] Plea Settlement at ¶ 10.
[8] USSG §§ 2R1.1(d), 8C2.4.
[9] Sentencing Memorandum at 4, United States v. VDA OC, LLC, No. 2:21-cr-00098 (D. Nev. Oct. 20, 2022). Apparently, the DOJ didn’t contemplate the worth of non-cash advantages or different types of non-monetary compensation to the affected nurses in calculating VDA’s base high quality.
[10] Id. at 4-5.
[11] For instance, a survey of 11 worker class motion settlements from 2002 to 2020 exhibits that the events settled for an quantity between 1.4% to five.3% of the whole compensation at concern. See Exhibit E to Movement for Preliminary Approval of Proposed Class Settlement, In re: Railway Business Emp. No-Poach Antitrust Litig., No. 18-mc-798 (W.D. Pa. Feb. 24, 2020).
[12] Sentencing Memorandum at 6.
[13] Frequency Requested Questions In regards to the Antitrust Division’s Leniency Program, U.S. Dep’t of Justice, Antitrust Division (Apr. 4, 2022), ¶¶ 34–35.
The next Gibson Dunn legal professionals ready this shopper alert: Scott Hammond, Jeremy Robison, and Sarah Akhtar.
Gibson Dunn legal professionals can be found to help in addressing any questions you will have relating to these developments. Please contact the Gibson Dunn lawyer with whom you often work, the authors, or any chief or member of the agency’s Antitrust and Competition or Labor and Employment follow teams:
Antitrust and Competitors Group:
Scott D. Hammond – Washington, D.C. (+1 202-887-3684, shammond@gibsondunn.com)
Jeremy Robison – Washington, D.C. (+1 202-955-8518, wrobison@gibsondunn.com)
Rachel S. Brass – Co-Chair, San Francisco (+1 415-393-8293, rbrass@gibsondunn.com)
Stephen Weissman – Co-Chair, Washington, D.C. (+1 202-955-8678, sweissman@gibsondunn.com)
Ali Nikpay – Co-Chair, London (+44 (0) 20 7071 4273, anikpay@gibsondunn.com)
Christian Riis-Madsen – Co-Chair, Brussels (+32 2 554 72 05, criis@gibsondunn.com)
Labor and Employment Group:
Jason C. Schwartz – Co-Chair, Washington, D.C. (+1 202-955-8242, jschwartz@gibsondunn.com)
Katherine V.A. Smith – Co-Chair, Los Angeles (+1 213-229-7107, ksmith@gibsondunn.com)
© 2022 Gibson, Dunn & Crutcher LLP
Lawyer Promoting: The enclosed supplies have been ready for normal informational functions solely and should not meant as authorized recommendation.
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