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: DaVita and its former CEO indicted, Justice Department charges illegal ‘no poaching’ deals with rivals

Dialysis and kidney-care giant DaVita Inc. and its former chief executive were charged this week with conspiring with competing companies to not solicit one another’s employees.

The Justice Department, which announced the charges Thursday, said a federal grand jury returned a two-count indictment against Denver-based DaVita
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and former Chairman and CEO Kent Thiry, who stepped down as chief executive of the company in 2019 after two decades in charge.

The first count charges DaVita and Thiry with conspiring with Surgical Care Affiliates — which was indicted in January — not to solicit each other’s senior-level employees from 2012 to 2017. The second count charges DaVita and Thiry for conspiring with an unnamed health care company from 2017 to 2019 through an agreement that the other company would not solicit DaVita’s employees. 

If convicted, Thiry could face jail time of up to 10 years and be fined up to $1 million for each count. DaVita could be fined a maximum of $100 million for each count.

In the indictment, prosecutors cited emails and text messages that allude to no-poaching agreements. One text message between two former colleagues asked for a recommendation for customer-service employees but, referring to a DaVita-owned pharmacy company, said “nobody at Rx today. Promised Kent!”

“Those who conspire to deprive workers of free-market opportunities and mobility are committing serious crimes that we will prosecute to the full extent of the law,” Acting Assistant Attorney General Richard A. Powers of the DOJ’s Antitrust Division said in a news release.

DaVita vowed to fight the charges.

“The charges against the company are unjust and unwarranted,” a company spokeswoman said. “The government’s case relies on an unprecedented and untested application of the antitrust laws to alleged discussions involving a former executive that occurred many years ago.”

Karen Crummy, a spokeswoman for Thiry, said: “These allegations are false and rely on a radical legal theory about senior executive recruitment without precedent in U.S. history… The facts bear it out decisively: No antitrust violations occurred, these companies hired DaVita executives for years, and the companies are not competitors.”

The defendants are scheduled to appear in U.S. District Court for the District of Colorado on July 20. 

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