Whether the president is named Obama or Trump, or the attorney general is named Lynch or Sessions, the U.S. Department of Justice has a consistent opinion on the sort of hiring collusion that a former Duke University radiologist alleges Duke and UNC-Chapel Hill have practiced.
Namely, that it’s illegal.
A spokeswoman for the Justice Department confirmed this week that President Donald Trump’s team there is standing by an October 2016 memo that equated formal or informal “no poach” agreements between employers to illegal price fixing because they “eliminate competition in the same irredeemable way.”
As policy, the memo credited to the department’s Antitrust Division and the Federal Trade Commission “is still good,” said Kerri Kupec, a Justice Department spokeswoman who checked that at the request of The Herald-Sun.
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The memo is noteworthy for speaking directly to the question of whether universities can collude to reduce the competition for faculty hiring, even if the collusion is via a quiet “gentlemen’s agreement” between them.
Federal officials stressed that when it comes to collusion, nothing need be written down for there to be a violation of anti-trust law.
“If you stopped recruiting and bidding for faculty from another university due to a gentleman’s agreement, you have become a member ofthat no-poaching agreement and could be subject to criminal liability,” they said, styling that as their answer to a question from a hypothetical human resources staffer at a hypothetical university who’d heard about an unwritten hiring agreement from “someone in the dean’s office.”
Lawyers for former Duke radiologist Danielle Seaman have told a judge the memo’s wording “seems inspired by the facts of” her lawsuit against Duke and UNC-CH.
If you stopped recruiting and bidding for faculty from another university due to a gentleman’s agreement, you have become a member ofthat no-poaching agreement and could be subject to criminal liability.
The U.S. Department of Justice and the Federal Trade Commission
Seaman claims she was shut out of a potential job swap from an assistant professor’s slot at Duke to an assistant professor’s slot at UNC because of a no-poach agreement between the respective then-deans of the universities’ medical schools, Nancy Andrews and Bill Roper. Seaman has documentation in the form of an email from a UNC official that told her “lateral moves between Duke and UNC are not permitted” because of the agreement.
Subsequent investigation by her lawyers has secured a deposition from Roper – still dean of the UNC School of Medicine and CEO of the UNC Health System – that saw him admit to urging subordinates to avoid “hostile, unneighborly behavior” toward Duke on the hiring front. He also conceded that he’d asked Duke’s former chancellor for health affairs, Victor Dzau, to consider formalizing “some kind of understanding between us about the movement of faculty.”
UNC has since settled with Seaman, pledging cooperation with her lawsuit, the avoidance of hiring collusion with any employer and an in-house effort to train senior officials on the relevant points of anti-trust law.
Meanwhile, Duke has signaled that it intends to deny any wrongdoing. Roper told lawyers Dzau rejected his push for an understanding, and the Durham school can point to several successful raids by it of UNC medical professors. A federal judge has nonetheless allowed the case to proceed as a class-action lawsuit on behalf of about 5,649 Duke and UNC professors.
Needless to say, Seaman’s lawyers aren’t taking Duke’s forthcoming denials at face value. They suspect the absence of a formal agreement masked understandings and practices that amounted to collusion.
They’ve also been keeping an eye on the Justice Department’s stance, and are pleased it didn’t change after Trump and U.S. Attorney General Jeff Sessions took over.
“There appears to be bipartisan support for the common-sense proposition that these kinds of agreements are clearly unlawful,” said lawyer Dean Harvey, a veteran of a successful collusion lawsuit that targeted Silcon Valley companies like Apple Corp. and Google Inc.
Indeed, the Antitrust Division’s chief, Assistant Attorney General Makan Delrahim, has signaled that the administration adheres not just to its predecessor’s view of the law, but its get-tough strategy for enforcing it.
There appears to be bipartisan support for the common-sense proposition that these kinds of agreements are clearly unlawful.
Dean Harvey, lawyer for former Duke radiologist Danielle Seaman
The Trump appointee, an Iranian immigrant who formerly served the president as a deputy White House counsel, told attendees of a recent conference at George Mason University’s law school that the Justice Department intends to file criminal charges soon against several employers suspected of hiring collusion.
“In the coming couple of months you will see some announcements, and to be honest with you, I’ve been shocked about how many of these there are,” Delrahim said, according to a report from the legal-industry trade publication Law360.
A second publication, Bloomberg Law, reported that Delrahim indicated that the department considers the October 2016 memo issued while Loretta Lynch was still U.S. Attorney General a dividing line. It will treat collusion that happened before the memo came out as a civil matter, resolvable through lawsuits. Collusion that followed the memo’s publication, on the other hand, is a criminal matter, with its perpetrators subject to prosecution.
That squared with the approach Obama administration officials advocated in a memo that vowed criminal investigations “going forward” and potential “felony charges against the culpable participants.”
Bloomberg Law reported that Delrahim also told his audience at George Mason that the Antitrust Division will look for civil lawsuits to file friend-of-the-court briefs in to get its point of view across.