In the Matter of Your Therapy Source, LLC – is the most recent example of federal antitrust enforcers’ increasing interest in curtailing anticompetitive conduct in employee markets, which was first announced when the Federal Trade Commission (FTC) and the Department of Justice (DOJ) issued guidance on the subject in late 2016. See Antitrust Guidance For Human Resource Professionals (available here). On July 31, the FTC announced that it had reached a settlement with a Texas therapist staffing company that the FTC alleged had agreed with a rival staffing company to reduce the compensation paid to their therapist employees.
In the Therapy Source matter, the FTC accused Sheri Yabray, the owner and CEO of Therapy Source, a Dallas therapist staffing company, of conspiring with Neeraj Jindal, the owner of a rival company, to reduce the rates paid to their physical therapists and physical therapist assistants. Specifically, the FTC Complaint alleges that, in response to a reduction in the fees that the staffing companies were receiving from insurers, Mr. Jindal and Ms. Yabray sought to reduce the rates paid to their therapist employees. After Mr. Jindal shared his proposed new rate schedule with Ms. Yabray in a text message, she allegedly responded by texting “Ok, we are going to lower [physical therapist rates] to your numbers.” The Complaint further alleges that Ms. Yabray subsequently sent text messages to other therapist staffing companies in the Dallas/Fort Worth area encouraging them to join in the agreement as well.
Rather than defend against the claims in the Complaint, both Ms. Yabray and Mr. Jindal agreed to settle the claims against them by accepting a consent decree. Pursuant to the terms of the settlement, the defendants are prohibited from continuing to engage in the challenged conduct, and are also required to attend antitrust compliance training and to file compliance reports with the FTC for a period of three years.
Bruce Hoffman, the Director of the FTC’s Bureau of Competition, issued a statement in connection with the settlement, stating that “Just as it is illegal for competitors to agree to fix prices on the products they sell in order to drive prices up, it is illegal for competitors to agree to fix wages or fees paid to workers in order to drive wages down.” He continued: “Fortunately, in cooperation with the Texas Attorney General’s Office, we were successful in stopping this conduct quite quickly. We will aggressively investigate any other instances in which companies engage in this type of behavior, and we will seek relief commensurate with the conduct, the harm to workers, and – where appropriate – any ill-gotten benefits received by the firms engaged in the illegal activities.”
Notably, while the FTC unanimously agreed to accept the proposed settlement, FTC Commissioner Rohit Chopra issued a separate statement noting that the settlement “does not include any restitution to those targeted by this unlawful conduct,” and stated that “the Commission would benefit from hearing from the public on whether it should follow this approach in this and future matters.” Accordingly, going forward, the risks associated with anticompetitive conduct in this area may become even more significant, particularly if Director Hoffman and Commissioner Chopra’s calls for restitution are embraced by the full Commission. Stay tuned.