Former Employee Alleges UnitedHealth Subsidiary Restrained Competition, Deflated Pay

A former employee of Surgical Care Affiliates, under a psuedonym, filed a putative class action complaint against his former employer and UnitedHealth, alleging that the company conspired with others to restrain competition among the labor market for senior-level employees of the companies, resulting in lower pay. The suit comes a month after the Department of Justice indicted Surgical Care arising from the same alleged scheme. The complaint was filed in the Northern District of Illinois.

The other companies said to be involved in the collusion are not named in the complaint, but are defendants in the case, listed as John Does 1-10. Referring to the criminal indictment, the complaint does mention a “Company A” and a “Company B” as being involved. The plaintiff alleged that three companies, all competitors, entered into “no-poach” agreements concerning senior employees from at least 2010 until 2017.

The complaint specifically cited emails from the CEOs of the unnamed companies, from both 2010 and 2014, referring to an agreement not to conduct “proactive” recruiting into each other. The plaintiff similarly referred to communications by human resources staff at the defendant companies, which also alluded to an agreement. Further communications indicated that the agreement was verbal, only pertained to employees above a certain level, and that executives “policed” violations of the agreement with recruiters they used to fill positions.

The complaint then explained that labor markets, and especially the market for “the specialzied field of senior management in the outpatient medical care industry” are subject to “high supply-demand pressures.” They conclude that the scheme has negatively affected compensation for all employees in positions subject to the agreement, in violation of the Sherman Act.

The plaintiff is represented by Scharf Banks Marmor, Fine, Kaplan & Black, Nussbaum Law Group, Mason Lietz & Klinger, the Roberts Law Firm US, and Kohn, Swift & Graf.