Employment Law Report
Consequences of the Justice Department’s Decision to Back Workers’ Antitrust Monopolization Lawsuit
By: Matthew L. Bunnell
A proposed class action[1] brought by nurses, doctors, and medical assistants accusing the University of Pittsburgh Medical Center (“UPMC”) of wielding its market power to suppress the labor market through noncompete agreements and blacklists has picked up support from the United States Department of Justice (“DOJ”). In a Statement of Interest filed with the United States District Court for the Western District of Pennsylvania last week, the DOJ’s Antitrust Division urged Judge Susan Paradise Baxter to reject the arguments asserted in UPMC’s motion to dismiss, which requested preliminary dismissal on the grounds that the complaint purportedly failed to spell out what the hospital’s market share for “skilled healthcare workers” in the relevant market was or offer any “structural evidence of a monopolized market.”
But, according to the DOJ, UPMC’s motion “misstates and misapplies” the relevant issues in the case and “fails to address” the proper standards for evaluating markets and monopoly power. Indeed, the DOJ’s filing argues that an acceptance of UPMC’s position would upend legal precedent and give other employers “a blank check to wield unlawfully acquired market power, which could result in reduced wages and worse working conditions in concentrated markets.” Likewise, the DOJ contends that UPMC’s motion should be rejected for raising the bar “to nearly insurmountable heights for complaints alleging exclusionary conduct . . . , demanding a level of granularity that plaintiffs will rarely be able to satisfy pre-discovery.”
Beyond the merits of this case, the DOJ’s involvement on behalf of UPMC workers signals an important development when considered together with the Federal Trade Commission’s (“FTC”) proposed (yet currently enjoined) Final Rule to ban non-compete agreements or their equivalent altogether. The DOJ’s Statement of Interest makes clear that the Biden administration’s antitrust enforcement efforts will continue to advocate the invalidity of non-competes and similar restrictive employment arrangements irrespective of whether the FTC’s Final Rule is ultimately upheld or stricken. Indeed, the DOJ’s position raises the possibility of antitrust violations if such restrictions are coupled with other “exclusionary practices” accomplished through serial acquisitions/mergers, no-rehire and/or non-solicitation arrangements, and unionization suppression efforts.
Accordingly, should you or another member of your business have any questions about the Final Rule’s impact on current and future non-compete agreements or the potential antitrust law consequences of a proposed merger on local labor markets, please contact a Wyatt lawyer. In addition, be sure to revisit the Wyatt Labor and Employment blog page for further developments and updates related to the FTC’s rulemaking, as well as other employment topics.
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[1] The case discussed here is styled and captioned, Victoria Ross v. University of Pittsburgh Medical Center, United States District Court for the Western District of Pennsylvania, Case No. 1:24-cv-00016-SPB.
