No-Poach Agreement Between Health Care Companies Prompts Class Action Lawsuit from Employee

On Monday, an employee filed a putative class action lawsuit against Munson Healthcare and Traverse Anesthesia Associates, P.C. (TAA) in the Western District of Michigan. The class alleged that the defendants are involved in anticompetitive business practices that violate the Sherman Act and the Michigan Antitrust Reform Act (MARA) because of their no-poach agreement. 

The members of the class, if approved, would include “all natural persons who were or are employed by Defendants as anesthesia service providers. Excluded from the Proposed Class are Defendants’ directors, officers, or employees who entered into the no-poach agreement.”

The plaintiffs believe, the complaint explained, that Munson, “Michigan’s largest and leading healthcare system” and TAA, a medical corporation that provides anesthesia and pain management services throughout several hospitals and outpatient sites in the region, had entered into a no-poach agreement in order to drive down competition in the job market and and suppress pay for the anesthesiologists they employ.

According to the plaintiff, the understanding between the two defendants is that “Munson would not solicit or hire TAA’s anesthesia service providers while they were employed by TAA and for at least one year after the person had left TAA’s employment.” The date at which this agreement began is unknown, according to the filing, but plaintiff believes that it is an ongoing practice that is still happening today.

The practice was first discovered this year when one of the plaintiffs learned that there was an anesthesia service provider position open at Munson. When he reached out to a hospital employee, this need was confirmed and the plaintiff expressed interest in filling the opening. However, the employee then told the plaintiff that “he could not be considered for the position because of an agreement between Munson and TAA that prohibited Munson from hiring any TAA employees to work for any Munson facility while employed by TAA or for a period of one year after leaving TAA.”

According to the employee, this was a rule that the CEO of Munson had promulgated throughout much of the hospital, including the HR and recruiting departments, which reportedly confirmed these practices to the plaintiff when he asked. 

The plaintiff claimed that this action is especially harmful to employees in this field of work because “there is high demand for and limited supply of anesthesia service providers.  Qualified individuals … are essential employees. However, if the hiring process is encumbered with prohibitions against the solicitation and hiring of this small talent pool, the price discovery environment will create market friction that will mask the supply-demand dynamic and suppress wages and benefits.”

Employees, especially those in anesthesia, are already at a disadvantage when it comes to price discovery and must rely on co-workers and recruiters to learn that information. Employers on the other hand have much more extensive information and would be at an even greater advantage when given the benefit of an uncompetitive market. 

The plaintiffs claimed that this behavior has stymied their ability to leverage the high demand for their position and requested that the court recognize the class, enjoin the defendants from following the terms of this illegal agreement, and award the class compensation for lost wages caused by the agreement.

The plaintiff is represented by Fink + Associates Law.