Earlier this month, the U.S. Department of Justice (“DOJ”) announced that a federal grand jury in Texas indicted Neeraj Jindal, the former owner of a physical therapist staffing company, in connection with an illegal wage-fixing conspiracy to depress pay rates for physical therapists (“PTs”) and physical therapist assistants (“PTAs”) who travel to patients’ homes or assisted living facilities in the greater Dallas-Fort Worth area.  The indictment was something of a landmark for the U.S. Department of Justice (“DOJ”), which for years had promised that such criminal prosecutions were forthcoming in connection with its ongoing investigations of illegal no-poach and wage-fixing agreements by employers.

In October 2016, during the closing weeks of the Obama Administration, the DOJ and the Federal Trade Commission (“FTC”) issued a remarkable document, entitled Antitrust Guidance for Human Resources Professionals, which outlines an aggressive policy, promising to investigate and punish employers, and even individual Human Resources employees, who enter into unlawful agreements concerning recruitment or retention of employees.  As stated in that document, “[a]n agreement among competing employers to limit or fix the terms of employment for potential hires may violate the antitrust laws if the agreement constrains individual firm decision-making with regard to wages, salaries or benefits; terms of employment; or even job opportunities.”

In the past four plus years, the Antitrust Division of the DOJ has announced on many occasions, via press releases, in congressional hearings or otherwise, that no-poaching and wage-fixing agreements among competing employers are an enforcement priority.  The DOJ did bring one well-publicized civil suit regarding no-poaching, and filed some “statements of interest” in pending civil class actions.  But it had filed no such criminal prosecutions - until December 9, 2020, when it secured the indictment of Mr. Jindal.

The indictment asserts two counts against Mr. Jindal: (1) an “antitrust conspiracy: price-fixing” violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, and (2) obstruction of investigative proceedings before the FTC for making false and misleading statements and withholding information.  The DOJ alleges that Mr. Jindal and his co-conspirators agreed to pay lower rates to certain PTs and PTAs, and that Mr. Jindal’s company did pay lower rates, from around March 2017 to around August 2017.  The indictment describes numerous text messages to and from Mr. Jindal concerning the wage-fixing conspiracy.

The indictment of Mr. Jindal serves as a reminder to employers that the DOJ and FTC will not hesitate to challenge unlawful wage-fixing and no-poach agreements, anticompetitive non-compete agreements, and the unlawful exchange of competitively sensitive employee information, including salary, wages, benefits, and compensation data.  Employers who are considering collaborating with others or making changes to their employee pay rates, policies and plans therefore would be wise to proceed with caution, keeping an eye on the antitrust laws and DOJ/FTC Guidance.

Back to Trade Secrets & Employee Mobility Blog

Search This Blog

Blog Editors

Authors

Related Services

Topics

Archives

Jump to Page

Subscribe

Sign up to receive an email notification when new Trade Secrets & Employee Mobility posts are published:

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.