On December 10th, the Antitrust Division of the U.S. Department of Justice announced its first criminal indictment targeting an alleged conspiracy to reduce employee wages. The DOJ charged the former owner of a therapist staffing company with conspiring to reduce pay rates for healthcare worker contractors, but did not charge the company itself. Specifically, the indictment alleges that, for a six-month period in 2017, the defendant and his co-conspirators exchanged non-public information on rates paid to healthcare workers; discussed and agreed to decrease rates paid to healthcare workers; implemented rate decreases in accordance with their agreement; and paid healthcare workers at collusive and noncompetitive rates. The indictment alleges that the defendant’s behavior constitutes a per se violation of the antitrust laws and seeks penalties including fines and potential imprisonment. The indictment also includes an obstruction of justice charge, stemming from allegedly false or misleading information the defendant provided the Federal Trade Commission during the agency’s investigation of the same subject matter.

For years, DOJ has been emphasizing the possibility of criminal charges for wage-fixing and other efforts to restrict competition in the labor markets. In 2016, the DOJ and FTC issued their joint Antitrust Guidance for Human Resource Professionals, warning human resource and other professionals involved in hiring that the DOJ would “criminally investigate allegations that employers have agreed among themselves on employee compensation or not to solicit or hire each others’ employees.” The Guidance further cautioned that, if a DOJ investigation “uncovers a naked wage-fixing or no-poaching agreement, the DOJ may . . . bring criminal, felony charges against the culpable participants in the agreement, including both individuals and companies.” In the four years since it was issued, the DOJ has opened a number of criminal investigations, but it had yet to bring a charge, and its criminal wage-fixing and no-poaching theories have remained untested in court.

The indictment underscores that enforcement agencies (and the DOJ in particular) are particularly focused on policing these types of anticompetitive agreements that restrict competition in labor markets. In addition to making clear that it considers wage-fixing and “no poach” agreements between employers to be per se violations of the Sherman Act, the DOJ has also been increasingly active in supporting private challenges to such restrictions. The indictment makes clear that such restrictions can now expose a company and individual participants in the conspiracy to criminal, as well as civil, liability.

These developments serve as a reminder for the need to closely adhere to the antitrust laws, including in areas that do not directly affect consumer prices (such as employee salaries or benefits). Compliance training, including for individuals involved in human resources and hiring, is an important tool for ensuring adherence and avoiding potential civil or criminal exposure down the road.

How Covington Can Help

Our antitrust practice group includes attorneys who served at the DOJ and FTC and who have decades of experience in advising on criminal antitrust matters. Our team has specific experience dealing with DOJ and counseling clients on these employee wage and “no poach” antitrust issues. We can provide detailed and practical insight into how these developments might apply, as well as compliance training for employees and briefings for senior management.

If you have any questions concerning the material discussed in this client alert, please contact the authors.

Photo of Thomas Barnett Thomas Barnett

Thomas Barnett is a partner in the Washington, DC office and co-chair of the firm’s Antitrust & Competition Law Practice Group. Tom served as Assistant Attorney General in charge of the Justice Department’s Antitrust Division. He headed the Antitrust Division from 2005 to…

Thomas Barnett is a partner in the Washington, DC office and co-chair of the firm’s Antitrust & Competition Law Practice Group. Tom served as Assistant Attorney General in charge of the Justice Department’s Antitrust Division. He headed the Antitrust Division from 2005 to 2008, having previously served in the Division as Deputy Assistant Attorney General for Civil Enforcement from 2004 to 2005. He specializes in global antitrust and competition law practice and works closely with the firm’s white collar practice on criminal antitrust enforcement and investigative matters.

During his tenure at the Department of Justice, Tom:

  • Oversaw the review of all mergers investigated by the Division and supervised more than 30 cases filed in federal district court.
  • Was involved in some of the largest and most complicated criminal matters in the Division’s history, including investigations and prosecutions that involved coordination with multiple competition authorities in other jurisdictions.
  • Led an active competition advocacy program that included numerous amicus briefs filed with the U.S. Supreme Court on antitrust issues and comments to a wide range of federal and state agencies.
  • Argued before the U.S. Supreme Court as amicus on behalf of the United States in Bell Atlantic Corp. v. Twombly.
  • Testified several times before Congressional committees.
  • Worked with international antitrust authorities throughout the world and served in leadership positions in key international competition organizations, such as chairing the Working Party on International Cooperation and Enforcement of the OECD Competition Committee and serving on the Steering Committee of the International Competition Network.
  • Received the Edmund Randolph Award, the U.S. Department of Justice’s highest honor, for his service in the Division.
  • Prior to 2004, Mr. Barnett was a leader in the firm’s Antitrust & Consumer Law Practice Group. He also served as an adjunct professor at Georgetown University Law Center, teaching a course on antitrust and intellectual property issues in sports in 2001 and 2003, and as a co-teacher of an advanced antitrust seminar at the University of Virginia Law School multiple times between 1991 and 2004.
Photo of Anne Lee Anne Lee

Anne Lee, co-chair of the firm’s global Antitrust and Competition Law Practice Group, advises clients in complex antitrust litigation matters, strategic transactions, and government investigations. She represents clients before the DOJ and FTC on multi-jurisdictional mergers, competitor collaborations, and joint ventures, and she has…

Anne Lee, co-chair of the firm’s global Antitrust and Competition Law Practice Group, advises clients in complex antitrust litigation matters, strategic transactions, and government investigations. She represents clients before the DOJ and FTC on multi-jurisdictional mergers, competitor collaborations, and joint ventures, and she has litigated cases at the trial and appellate levels in both state and federal courts. Anne also provides antitrust counseling on a wide range of business conduct and compliance issues. A recognized leader in the area, Anne has been named to the “40 Under 40” rankings of both The National Law Journal and Global Competition Review.

Photo of Phillip Warren Phillip Warren

Phillip Warren specializes in global antitrust and competition law practice, representing corporations and executives in criminal antitrust and other white-collar government investigations and litigation, and related multi-district class actions. He also provides corporate compliance counseling and conducts internal corporate investigations.

Before joining Covington…

Phillip Warren specializes in global antitrust and competition law practice, representing corporations and executives in criminal antitrust and other white-collar government investigations and litigation, and related multi-district class actions. He also provides corporate compliance counseling and conducts internal corporate investigations.

Before joining Covington, Phillip served in the U.S. Justice Department’s Antitrust Division for more than 30 years. He was Chief of the San Francisco Office from 2002 to 2013. At the Justice Department, he led or supervised more than 50 international cartel investigations and several major antitrust trials.

In his role as Chief, Phillip oversaw all aspects of grand jury investigations and plea negotiations in international cartel matters in more than a dozen industries, including commodity chemicals and many high-technology products such as DRAM, TFT-LCD panels, cathode ray tubes, optical disk drives, and lithium ion battery cells. He also closely supervised all aspects of several major criminal antitrust trials, including the LCD panel price-fixing trials—U.S. v. AU Optronics Corp., U.S. v. Leung, and U.S. v. Bai. Under his leadership, the Division’s San Francisco Office obtained more than $2.5 billion in fines in criminal cases.

He worked with Division officials on developing the Antitrust Division’s international cartel enforcement policy, including application of the Division’s Leniency Program, policies for negotiating plea terms with corporations and executives, and practices for coordinating investigations with foreign enforcement authorities.

In addition to his criminal enforcement experience, Phillip has an extensive background in civil antitrust enforcement. He reviewed and approved all staff analyses of premerger filings involving California-based, high-technology firms, and oversaw all aspects of preliminary inquiries and Second Requests of proposed transactions that raised potential competitive issues.

Prior to his position as Chief, Phillip was a trial attorney and then served as the Assistant Chief in the office from 1997 to 2002. In these positions, he was lead attorney on many significant Division cases, including U.S. v. Archer Daniels Midland Co. (citric acid), U.S. v. Sprint/France Telecom/Deutsche Telekom, and U.S. v. All Star Industries.

While at the Department of Justice, Phillip coordinated investigations of international cartels with enforcement agencies worldwide, including Canada, the European Commission, Japan, Korea, Mexico, and Singapore. In addition, he led or participated in training sessions for enforcement officials in many jurisdictions.

Phillip has been a regular speaker on antitrust panels and programs around the world for more than two decades. He currently serves on the International Cartel Task Force of the American Bar Association’s Antitrust Section and is a Non-Governmental Adviser to the International Competition Network, an informal network of all the world’s competition authorities formed to promote best practices in antitrust enforcement globally.

Photo of Derek Ludwin Derek Ludwin

Derek Ludwin is a leader of Covington’s Antitrust Litigation and Sports Practice Groups and advises clients around the world on high-stakes litigation, transactions, investigations, licensing, and compliance issues.

Derek has significant experience helping clients successfully navigate complex, multi-district litigations and challenging government investigations…

Derek Ludwin is a leader of Covington’s Antitrust Litigation and Sports Practice Groups and advises clients around the world on high-stakes litigation, transactions, investigations, licensing, and compliance issues.

Derek has significant experience helping clients successfully navigate complex, multi-district litigations and challenging government investigations, and has built a record of achieving positive outcomes. He also advises clients in structuring and securing regulatory clearance for major transactions, and is frequently sought out for guidance when clients are considering significant acquisitions, ventures, licensing arrangements, and other transactions with potential antitrust issues. Derek regularly represents the National Football League, as well as leading businesses in a variety of industries.

Recognized by Chambers in both the antitrust and sports fields, Derek is recommended for his counseling skills, his focus on client interests, his pragmatic approach to favorably and promptly addressing disputes and regulatory clearances, and his ability to work effectively with both business and in-house legal teams.

Photo of Steve Fagell Steve Fagell

Steve Fagell co-chairs the firm’s white collar defense and investigations practice, and he is widely recognized as one of the nation’s leading white collar practitioners.

As a former senior official in the Criminal Division at the U.S. Department of Justice, Steve represents multinational…

Steve Fagell co-chairs the firm’s white collar defense and investigations practice, and he is widely recognized as one of the nation’s leading white collar practitioners.

As a former senior official in the Criminal Division at the U.S. Department of Justice, Steve represents multinational companies and senior executives in criminal and civil investigations by the Justice Department, the U.S. Securities and Exchange Commission, and other U.S. regulators.

Steve is a two-time Law360 “White Collar MVP” winner (in 2023 and 2020), an award that recognizes the most outstanding practitioners in the field each year nationwide. Law360 has highlighted the “big wins,” which include five corporate declinations from DOJ or the SEC in a single year, and “impressive, relatively painless resolutions” that Steve has obtained for “prominent corporate clients. Chambers USA has long ranked him as a leading white collar lawyer in Washington, DC and as a nationwide FCPA expert. Clients have described Steve in Chambers as “the ultimate regulator whisperer,” adding that he is “extremely practical and a phenomenal problem solver on some of the thorniest legal issues you can imagine,” “extremely good,” and “one of the smartest guys around” who “doesn’t miss a beat.” Earlier in his career, Global Investigations Review recognized Steve as the top investigations practitioner (45 and under) in the United States, noting that he has an “eminent name for both corporations and individuals on matters of high-stakes civil and criminal enforcement.”

Photo of Ross Demain Ross Demain

Ross Demain advises clients in complex antitrust matters, including mergers and acquisitions, joint ventures, and other transactions; government investigations; litigation; compliance; and trade association activities.

He has represented clients in civil and criminal investigations before the Department of Justice, Federal Trade Commission, and…

Ross Demain advises clients in complex antitrust matters, including mergers and acquisitions, joint ventures, and other transactions; government investigations; litigation; compliance; and trade association activities.

He has represented clients in civil and criminal investigations before the Department of Justice, Federal Trade Commission, and state antitrust enforcers, and in private antitrust litigation as both plaintiffs and defendants. Ross also regularly helps clients assess and comply with their premerger notification obligations under the Hart-Scott Rodino (HSR) Act.

Ross has significant experience helping clients achieve positive outcomes across a variety of industries and sectors, including technology, media, electronics, cable, broadcast, industrial products, energy and natural resources, defense, pharmaceuticals, medical devices, sports, and financial services.

Representative litigation victories in which Ross has been involved include:

  • obtaining dismissal of an antitrust claim in a precedent-setting case at the International Trade Commission (ITC) that confirmed that the antitrust injury requirement applies to claims brought under Section 337 (ITC 2018);
  • achieving one of the first dismissals of a corporate defendant on jurisdictional grounds in the sprawling, In re Automotive Parts Antitrust Litigation (E.D. Mich. 2013);
  • attaining dismissal of a purported class action antitrust suit brought by retired NFL players alleging a conspiracy to restrain a market for the sale of their images and likenesses, Washington v. National Football League (D. Minn. 2012); and
  • obtaining an early dismissal of novel resale price maintenance claims brought in federal court under New York’s Donnelly Act, Worldhomecenter.com, Inc. v. KWC America, Inc. (S.D.N.Y. 2011).
Photo of Sonia Lahr-Pastor Sonia Lahr-Pastor

Sonia Lahr-Pastor advises and represents clients in complex, high-stakes antitrust matters. She has experience representing clients in matters before the Department of Justice and the Federal Trade Commission, including responding to Second Requests and Civil Investigative Demands. She also represents clients as both…

Sonia Lahr-Pastor advises and represents clients in complex, high-stakes antitrust matters. She has experience representing clients in matters before the Department of Justice and the Federal Trade Commission, including responding to Second Requests and Civil Investigative Demands. She also represents clients as both plaintiffs and defendants in private federal antitrust litigation, including consumer class actions and other complex litigation. Sonia also counsels clients on a variety of antitrust matters.