FTC, DOJ guidance puts health system hiring practices in the crosshairs

The Federal Trade Commission and the Department of Justice's Antitrust Division issued guidance Oct. 20 for human resource professionals and others involved in hiring and compensation decisions.

"Competition is essential to well-functioning markets, and job markets are no exception," said FTC Chairwoman Edith Ramirez. "These guidelines will help ensure that employers understand how to comply with the antitrust laws and will help employees reap the benefits of a competitive market for their services."

According to the joint guidance, the DOJ will criminally investigate no-poaching or wage-fixing agreements that are unrelated or unnecessary to a larger legitimate collaboration between employers.

Hospital and health systems should pay attention to the guidance from federal regulators, as recent government investigations and private lawsuits have focused on wage-fixing and no-poaching agreements in healthcare, according to Stephen Wu, antitrust partner at McDermott Will & Emery and former attorney for the FTC.

"Such practices can constitute per se violations of the antitrust laws, meaning defendant employers cannot put on any defenses once the fact of an agreement to fix wages or not to recruit is established," says Mr. Wu.

The guidance from the FTC and DOJ provides HR professionals with information to prevent violations and report potentially unlawful activity.

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