In first-of-its-kind antitrust win, DOJ fines firm for suppressing wages of school nurses in NV

By: - November 8, 2022 6:43 am
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Legal experts say it is the first criminal case win of its kind and could potentially be a landmark antitrust case. (Sang Hyun Cho from Pixabay)

The Department of Justice last week announced it had reached an agreement with a health care staffing company that conspired with a competitor to keep wages low for nurses working with medically fragile students.

Legal experts say it is the first criminal case win of its kind and could potentially be a landmark antitrust case.

The Ohio-based healthcare staffing company VDA OC LLC pleaded guilty in federal court on Oct. 27 and was sentenced to pay $134,000 — $62,000 of which is a criminal fine and $72,000 of which is restitution to the nurses affected by the illegal “no poach” agreement.

The case involves a company called Advantage On Call, which was acquired by VDA OC LLC. Advantage On Call was one of two staffing companies contracted by Clark County School District in 2013 to staff the district with nurses who could “provide constant care to medically fragile students, including during classroom time, traveling the hallways, bus rides, meals, field trips, and other school-based activities,” according to court filings.

The DOJ found that from about October 2016 until July 2017, Advantage On Call conspired with the second contracted company, which was not named in the court documents, to “suppress and eliminate competition for the services of nurses by agreeing to allocate nurses and to fix the wages of those nurses.”

The school district was not a party in the case.

According to court documents, a regional manager for VDA emailed an executive at the other contracted company and wrote, “After our conversation, we will not be recruiting any of your active CCSD nurses.” He added, “If someone threatens us for more money, we’ll tell them to kick rocks!”

The competitor responded and confirmed they were in agreement. They added, “I am glad we can work together through this, and assure that we will not let the field employees run our businesses moving forward.”

Such “no poach” colluding and wage-fixing are violations of the Sherman Antitrust Act, the federal legislation that sets antitrust standards.

Katherine Van Dyck, senior legal counsel at the American Economic Liberties Project, which advocates for stronger antitrust laws, says historically enforcement of the Sherman Act has focused on violations involving consumer welfare, but that is slowly changing with cases like the one against VDA or a separate case regarding book publisher Penguin Random House’s proposed acquisition of Simon & Schuster.

“People are recognizing that these companies with huge market power — whether it be market power of nurses in Nevada, or authors across the U.S. — are not just taking advantage of consumers,” she said. “They are taking advantage of their workers, suppressing wages. People know that. People are not willing to accept it anymore.”

In 2016, the DOJ and the Federal Trade Commission began warning companies it would prosecute similar Sherman Act violations criminally — not just civilly. Two other criminal cases have been brought but were unsuccessful.

“Today’s guilty plea demonstrates our commitment to ensuring that workers receive competitive wages and a fair chance to pursue better work and that criminals who conspire to deprive them of those rights are held accountable,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division in a statement announcing the guilty plea and sentencing. “The court’s sentence will compensate the hardworking health care workers who were victims of this crime.”

In addition to bringing charges against VDA, the DOJ also indicted Ryan Hee, the company’s former regional manager. That case is still pending.

An attorney in a National Law Review piece characterized the DOJ as taking an “aggressive posture” and wrote that employers need to make sure that everyone — from recruiters up to the c-suite — is aware of possible violations.

Van Dyck says Sherman Act violations are likely “more commonplace than people probably realize.”

“People, A, think they can get away with it, or, B, forget it exists. When you have these types of cases, which are criminal cases, that’s a serious threat… This is a crime that is punishable with imprisonment.”

Sherman Act violations come with the possibility of up to 10 years in prison, a $1 million fine for individuals, or a $100 million fine for corporations. Penalties are dependent on how big the company is.

The criminal fine and restitution agreed upon in the VDA settlement were “significant” for the company’s size, say legal experts.

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April Corbin Girnus
April Corbin Girnus

April Corbin Girnus is an award-winning journalist with a decade of media experience. She has been a beat writer at Las Vegas Sun, a staff writer at LEO Weekly, web editor of Las Vegas Weekly and a blogger documenting North American bike share systems’ efforts to increase ridership in underserved communities. An occasional adjunct journalism professor, April steadfastly rejects the notion that journalism is a worthless major. Amid the Great Recession, she earned a B.A. in journalism from the University of Nevada Las Vegas, where she served as editor-in-chief of the student newspaper. She later earned an M.A. in media studies and a graduate certificate in media management from The New School for Public Engagement. A stickler about municipal boundary lines, April enjoys teaching people about unincorporated Clark County. She grew up in Sunrise Manor and currently resides in Paradise with her husband, three children and one mutt.

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