Earlier this year, a Colorado jury acquitted DaVita and its former CEO Kent Thiry on charges that they conspired with competitors to not hire each other’s employees. The Department of Justice (DOJ) alleged that DaVita and Surgical Care Affiliates LLC required senior-level employees who wanted to work for them to notify their current employers that they were job-hunting.
Indictment and Allegations
In the indictment, the DOJ alleged that beginning “at least as early as February 2012 and continuing until at least as late as July 2017,” DaVita and Thiry engaged in a conspiracy with Surgical Care Affiliates to suppress competition between them for senior-level employees by agreeing not to solicit each other’s senior-level employees.
To further the conspiracy, DaVita, Thiry, and their co-conspirators allegedly participated in meetings, conversations, and communications to discuss employee solicitation. One example included an October 2014 email from Thiry to “Individual 1” that said “Someone called me to suggest they reach out to your senior biz dev guy for our corresponding spot. I explained I do not do proactive recruiting into your ranks.”
DaVita, Thiry, and the co-conspirators also allegedly instructed certain executives, employees, and recruiters not to solicit senior-level employees of each other’s companies, including an alleged December 2015 email from the Surgical Care Affiliates human resources executive to a recruiter, saying “note that [Company A, another competitor of Surgical Care Affiliates] and Davita are off limits to SCA.”
The DOJ also alleged that DaVita had similar agreements with two other companies, Hazel Health, Inc. and Radiology Partners, to not hire DaVita employees.
DaVita and Thiry argued that the non-solicitation agreements did not violate any laws and that the government was exaggerating how the Sherman Anti-Trust Act should eb interpreted. DaVita’s attorney John Dodds also made the argument that by asking employees to tell supervisors about their job hunts, it was meant to make DaVita more competitive by offering raises or promotions to keep those employees. “It may have been the wrong way to do it; it may have been a messy way to do it,” Dodd said. “But the question is the purpose of it. That was the purpose of it.”
Acquittal
Following the acquittal, Thiry noted that this case was the third straight anti-trust case that the government lost in the prior month, saying, “I think there will be much written about these cases, and I advise everyone to read them carefully because, while we and these other two groups were found innocent, we still don’t know how the pattern of prosecution will continue to unfold.”
“We appreciate the jury’s unanimous decision and are grateful to put this matter behind us. We remain committed to operating with integrity and upholding the highest standards of law,” DaVita said.
Despite the loss, the DOJ still believes that the trial “muddies the waters” for companies that are unsure about non-solicitation agreements.
Surgical Care Affiliates was charged in early 2021 for their alleged involvement and trial has been set for early 2023.