Legal briefs filed by state and national business organizations and the National Association of Criminal Defense Lawyers argue that federal charges in an antitrust case against Denver-based DaVita Inc. and its former CEO Kent Thiry should be dismissed.
In a brief filed Thursday, the Colorado Chamber of Commerce said the state shouldn’t be used as “a laboratory” for a new application of the Sherman Antitrust Act. The U.S. Department of Justice announced in July that a federal grand jury handed up a two-count indictment against DaVita and Thiry for conspiring with other health care firms to not solicit each other’s employees.
The charges stem from an investigation by the DOJ’s Antitrust Division into employee allocation agreements in which health care providers pledged to not recruit each other’s workers. The agreements limit workers’ ability to earn higher pay and advance their careers, the DOJ said.
But the Colorado Chamber of Commerce, the U.S. Chamber of Commerce and the criminal defense lawyers’ association said no court has found that non-solicitation agreements are illegal, per se. That raises questions about the right of due process because of the lack of fair notice about whether an act is illegal, the organizations said.
“Under the law that exists today (and in all of the years before today), there has been nothing close to a ‘fair warning’ that no-solicitation or no-hire agreements constitute per se violations of the Sherman Act that might give rise to criminal liability. Just the opposite,” the criminal defense lawyers’ group said in its brief.
The DOJ is also usurping the authority of Congress and the courts by declaring that “no-poaching” agreements are criminal offenses, according to the briefs.
In a previous statement, Acting Assistant Attorney General Richard A. Powers of the DOJ’s Antitrust Division said those who conspire to deprive workers of their free-market opportunities and mobility “are committing serious crimes that we will prosecute to the full extent of the law.”
The indictment charges DaVita and Thiry with conspiring with Surgical Care Affiliates to not solicit each other’s senior-level employees from as early as February 2012 until July 2017. Surgical Care Affiliates was charged in January in a case pending in the Northern District of Texas.
The second count charges DaVita and Thiry with conspiring with another health care company from as early as April 2017 until June 2019 to not solicit DaVita employees. The other company wasn’t named in July’s announcement. The DOJ didn’t respond to a request Friday for the name.
If convicted, DaVita faces a maximum penalty of a $100 million fine per count and Thiry faces a maximum penalty of 10 years in prison and a $1 million fine per count. The maximum fines could be increased depending on losses sustained by employees.
The Antitrust Division has ignored and even withheld evidence that could help Thiry, Karen Crummy, his spokeswoman said. She said the companies hired DaVita executives for years and are not competitors.
DaVita has called the charges “unjust and unwarranted.”
Thiry moved the headquarters of DaVita from Segundo, Calif., to Denver in 2009 and rapidly grew the company’s network of dialysis centers before stepping down as CEO in 2019 after two decades at the helm of the company, one of the country’s largest providers of kidney dialysis services.
Over the years, the company has faced several federal investigations.
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