Antitrust Law Daily Justice Department makes good on pledge to criminally prosecute suspected wage fixing
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Thursday, December 10, 2020

Justice Department makes good on pledge to criminally prosecute suspected wage fixing

By Jeffrey May, J.D.

Indictment charges former owner of a therapist staffing company with conspiring to fix rates paid to physical therapists, assistants in Texas.

The former owner of a therapist staffing company has been charged with participating in a conspiracy to fix prices by lowering the rates paid to physical therapists and physical therapist assistants in the Dallas-Fort Worth metropolitan area, the Department of Justice announced today. A two-count indictment naming Neeraj Jindal was filed on December 9 in the federal district court in Sherman, Texas. The indictment also charged Jindal with obstruction of a separate FTC investigation into the conduct. The charge marks the first criminal prosecution of wage fixing involving employers since the Department of Justice Antitrust Division and FTC issued guidance alerting human resource of the threat of criminal enforcement in October 2016 (U.S. v. Jindal, Case 4:20-cr-00358-ALM-KPJ).

Jindal and his unnamed co-conspirators allegedly agreed to pay lower rates to certain physical therapists and physical therapist assistants, and Jindal’s company paid lower rates, from about March 2017 through about August 2017, according to the government. Jindal was charged with participating in the conspiracy when he was the owner of a Texas-based therapist staffing company that provided in-home physical therapy services.

In addition, Jindal was charged with obstruction of proceedings before the FTC. Jindal allegedly made false and misleading statements and withheld and concealed information during the FTC’s investigation to determine whether Jindal’s company or other therapist staffing companies violated Section 5 of the FTC Act.

FTC settlement. In 2017, the FTC announced a settlement with Jindal, and Your Therapy Source, LLC and that company’s founder/owner Sheri Yarbray, resolving allegations that they violated Section 5 of the FTC Act "by unreasonably restraining competition to offer competitive pay rates to therapists; fixing or decreasing pay rates for therapists; and depriving therapists of the benefits of competition among therapist staffing companies." Jindal was alleged to have been the owner of Fit 4 Life Therapy, LLC, a business he eventually sold. That business was not named in the FTC matter. Commissioner Rohit Chopra issued a dissenting statement, saying that the alleged conduct raised questions of criminal liability.

Guidance for HR professionals. The case against Jindal is the first criminal case announced by the Antitrust Division challenging wage fixing since guidance was issued four years ago. In October 2016, the Obama Administration's Antitrust Division announced that "naked" agreements among employers not to "poach" employees or not to compete on employee compensation would be treated as per se illegal and subject to criminal prosecution under appropriate circumstances. In 2017, Andrew Finch, who served as the Acting Assistant Attorney General in charge of the Antitrust Division pending the Senate’s confirmation of the current antitrust chief, Makan Delrahim, showed support for the policy. However, until now, there has not been a criminal case.

In 2017, the Antitrust Division brought a civil action against Knorr-Bremse AG and Westinghouse Air Brake Technologies Corporation, two of the world’s largest rail equipment suppliers, resolving allegations that they agreed not to poach employees. At that time, the Antitrust Division said that the alleged no-poach agreements were discovered by the government and terminated by the parties before October 2016, prompting the Antitrust Division to resolve its competition concerns through a civil action. In today’s announcement, the Antitrust Division said that it remained committed to prosecuting collusion in labor markets.

Companies: Fit 4 Life Therapy, LLC; Your Therapy Source, LLC; Knorr-Bremse AG; Westinghouse Air Brake Technologies Corp.

MainStory: TopStory Antitrust AntitrustDivisionNews FederalTradeCommissionNews GCNNews TexasNews

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