Justice Department Seeks to Intervene in Private Class Action to Enforce Prohibition on Unlawful “No-Poach” Agreements

The Department of Justice announced today that it has filed an unopposed motion to intervene in a private antitrust class action challenging alleged agreements between Duke University (Duke) and the University of North Carolina (UNC) not to compete for each other’s medical faculty.  At the same time, the Department joined the parties’ proposed settlement agreement for the limited purpose of obtaining the right to enforce an injunction designed to prevent the maintenance or recurrence of any unlawful no-poach agreements.  If approved by the court, the settlement would give the United States the right to enforce an injunction and certain compliance and reporting requirements against Duke.  The case is Seaman v. Duke University and Duke University Health System, Case No. 15-cv-00462, in the United States District Court for the Middle District of North Carolina.

Under the terms of the proposed settlement, Duke is prohibited from entering, maintaining, or enforcing unlawful no-poach agreements for five years.  The settlement, if approved by the court, also requires Duke to implement rigorous notification and compliance measures to preclude its entry into these types of anticompetitive agreements in the future. 

“Dr. Seaman’s class action challenged alleged anticompetitive conduct occurring at the intersection of two important sectors of the U.S. economy: healthcare and higher education,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “Today’s filings, along with the Statement of Interest we filed in March, make clear that the Antitrust Division will use all of its enforcement and advocacy tools to ensure that labor markets across the economy are free from anticompetitive conduct and that workers receive the benefits of robust competition for their labor.”

On June 9, 2015, Dr. Danielle Seaman, an assistant professor at Duke University School of Medicine, filed a class action alleging that Duke and UNC agreed not to permit lateral hiring of faculty between the universities.  Her complaint further alleged that the universities’ agreement violates Section 1 of the Sherman Act by eliminating competition for faculty, restricting their mobility, and suppressing their compensation.  In 2018, the court certified a class comprised of faculty members with an academic appointment at the Duke or UNC Schools of Medicine.

In March 2019, the Department’s Antitrust Division filed a Statement of Interest in this lawsuit addressing the proper application of the antitrust laws, including the standard for judging the legality of alleged no-poach agreements under the Sherman Act.  In April 2019, the litigants announced an agreement to settle the case.  The Department sought to intervene in the litigation for the limited purpose of joining the proposed settlement and thereby obtaining the right to enforce any injunctive relief entered by the court against Duke. 

“I would like to thank our colleagues at the United States Attorney’s Office for the Middle District of North Carolina for their assistance,” said Assistant Attorney General Delrahim. “In addition, we commend the litigants for working cooperatively with us throughout the resolution of this matter, including for agreeing to permit the United States to seek to intervene in this settlement.  Permitting the United States to become part of this settlement agreement in this private antitrust case, and thereby to obtain all of the relief and protections it likely would have sought after a lengthy investigation, demonstrates the benefits that can be obtained efficiently for the American worker when public and private enforcement work in tandem.”

Duke is a private research university located in Durham, North Carolina.  It has several schools and institutes, including the Duke University School of Medicine.

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Author: May 20, 2019

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