Case: 1:21-cv-01324 Document #: 1 Filed: 03/09/21 Page 1 of 25 PageID #:1
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`UNITE D ST ATES DISTRI CT COURT
`NORTHE RN DIST RICT OF ILLI NOI S
`EASTERN DIVISIO N
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`Case No.
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`CLASS ACTION COMPLAINT
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`JURY TRIAL DEMANDED
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`ALLEN SPRADLING,
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`Plaintiff,
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`v.
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`SURGICAL CARE AFFILIATES, LLC, SCAI
`HOLDINGS, LLC, ANDREW HAYEK,
`UNITEDHEALTH GROUP, INC., UNITED
`SURGICAL PARTNERS HOLDING
`COMPANY, INC., UNITED SURGICAL
`PARTNERS INTERNATIONAL, INC., TENET
`HEALTHCARE CORPORATION, and
`JOHN DOES 1-10,
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`Defendants.
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`
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`Plaintiff Allen Spradling, on behalf of himself and all others similarly situated, brings this
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`Class Action Complaint against Defendants Surgical Care Affiliates, LLC, SCAI Holdings, LLC,
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`and Andrew Hayek (collectively “SCA”); UnitedHealth Group, Inc. (“United”), United Surgical
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`Partners Holding Company, Inc., United Surgical Partners International, Inc., and Tenet
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`Healthcare Corporation (collectively “USPI”); and John Does 1-10 (“Does”), for violations of
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`Section 1 the Sherman Act, 15 U.S.C. § 1, and Section 4 of the Clayton Act, 15 U.S.C. § 15(a),
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`as follows:
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`INTRODUCTION
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`1. SCA, United, USPI, and Does (collectively “Defendants”) agreed not to compete for each
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`other’s senior-level employees in the United States, refraining from soliciting or hiring
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`employees absent the knowledge and consent of their existing employers. Defendants’ conduct is
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`a per se violation of Section 1 the Sherman Act, 15 U.S.C. § 1, and Section 4 of the Clayton Act,
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`15 U.S.C. § 15(a). These “no-poach” or “no hire” agreements (collectively “no poach
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`agreements”) began no later than 2010 and continued through at least 2017. Defendants’ most
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`senior executives entered into, monitored and enforced these agreements.
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`2. Defendants’ no-poach agreements were not necessary to any legitimate business
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`transaction or lawful collaboration among the companies. Defendants’ conspiracy was strictly a
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`tool to suppress their senior-level employees’ compensation, thereby reducing their own
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`expenses.
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`3. Defendants’ no-poach agreements accomplished their purpose. The agreements reduced
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`competition for Defendants’ senior-level employees and suppressed Defendants’ senior-level
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`employees’ compensation below competitive levels. The conspiracy disrupted the efficient
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`allocation of labor that would have existed if Defendants had competed for, rather than colluded
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`against, their current and prospective senior-level employees.
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`4. Defendants’ agreements also denied their senior-level employees access to job
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`opportunities, restricted their mobility, and deprived them of significant information that they
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`could have used to negotiate for better compensation and terms of employment.
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`5. Defendants’ conspiracy was initially revealed publicly on January 7, 2021, when the
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`United States Department of Justice (“DOJ”) issued a press release announcing a criminal
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`indictment against SCA, which detailed the conspiracy. That indictment references two co-
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`conspirator companies—“Company A” and “Company B.” See Indictment, United States v.
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`Surgical Care Affiliates, LLC, No. 3:21-cr-00011 (N.D. Tex.) (filed Jan. 5, 2021). Upon
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`information and belief, Plaintiff alleges that “Company A” refers to USPI.
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`6. Plaintiff is a former, senior-level employee of SCA and brings this suit individually and
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`on behalf of the Proposed Class to recover damages and injunctive relief to prevent Defendants
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`from retaining the benefits of their antitrust violations.
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`JURISDICTION AND VENUE
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`7. Plaintiff brings this action on his own behalf as well as that of the Class to recover
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`damages, including treble damages, costs of suit, and reasonable attorneys’ fees arising from
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`Defendants’ violations of Section 1 of the Sherman Act (15 U.S.C. § 1) and Section 4 of the
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`Clayton Act (15 U.S.C. § 15(a)), as well as any and all equitable relief afforded them under the
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`federal laws pled herein.
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`8. Jurisdiction and venue are proper in this judicial district pursuant to Section 12 of the
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`Clayton Act (15 U.S.C. § 22), and 28 U.S.C. § 1391(b), (c) and (d), because a substantial part of
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`the events giving rise to Plaintiff’s claims occurred in this District, a substantial portion of the
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`affected interstate trade and commerce was carried out in this District, and one or more of the
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`Defendants reside in this District or are licensed to do business in this District. Defendants
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`transacted business, maintained substantial contacts, and/or committed overt acts in furtherance
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`of the illegal scheme and conspiracy throughout the United States, including in this District.
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`Defendant SCA has its principal place of business in this District. The scheme and conspiracy
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`have been directed at, and have had the intended effect of, causing injury to persons residing in,
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`located in, or doing business throughout the United States, including in this District.
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`PARTIES
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`9. Allen Spradling is a resident of Hoover, Alabama. He was employed by Defendant
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`Surgical Care Affiliates, LLC from September 22, 2008 to April 26, 2013, first as a Manager,
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`Program Management Office, and then as a Director, Information Technology.
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`10. Defendant Surgical Care Affiliates, LLC is a company organized and existing under the
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`laws of Delaware with its principal place of business at 510 Lake Cook Road, Suite 400,
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`Deerfield, Illinois, 60015. Surgical Care Affiliates, LLC is a wholly owned subsidiary of
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`UnitedHealth Group. Inc.
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`11. Defendant SCAI Holdings, LLC is a company organized and existing under the laws of
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`Delaware with its principal place of business at 510 Lake Cook Road, Suite 400, Deerfield,
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`Illinois, 60015. SCAI Holdings, LLC is a wholly owned subsidiary of UnitedHealth Group, Inc.
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`12. Defendant Andrew Hayek is a resident of Illinois. He was President and Chief Executive
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`Officer of SCA from 2008 until 2017. In 2017, he became Chief Executive Officer of
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`OptumHealth. In 2019, he became Executive Vice President of Optum. Upon information and
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`belief, Defendant Hayek is referred to as “Individual 1” in the DOJ indictment.
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`13. Defendants Surgical Care Affiliates, LLC, SCAI Holdings, LLC, and Andrew Hayek are
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`collectively referred to as “SCA.” SCA owns and operates approximately 230 outpatient medical
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`care facilities across the United States and employs approximately 10,000 individuals to operate
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`its business at its headquarters location and at other locations across the United States, serving
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`almost one million patients each year. SCA’s mission is to “provid[e] high quality outcomes and
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`a better experience for patients and providers, all at a lower total cost of care.” In Fiscal Year
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`2016, SCA had net operating revenues of approximately $1.2 billion, with $226 million in
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`EBITDA. In 2017, SCA was acquired by United through its subsidiaries for $2.3 billion.
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`14. Defendant UnitedHealth Group, Inc. (“United”) is a company organized and existing
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`under the laws of Delaware, with its principal place of business at 9900 Bren Road East,
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`UnitedHealth Group Center, Minnetonka, MN 55343. Through its subsidiaries, United operates
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`two distinct business platforms: health insurance and health services. In 2020, it was the second-
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`largest healthcare company by revenue with $257.1 billion, and the largest insurance company
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`by Net Premiums. United was ranked 7th on the 2020 Fortune 500 list.
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`15. Defendant United Surgical Partners Holding Company, Inc. is a company organized and
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`existing under the laws of Delaware with its principal place of business at 14201 Dallas
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`Parkway, Dallas, Texas, 75254. United Surgical Partners Holding Company, Inc. is a wholly
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`owned subsidiary of Defendant Tenet.
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`16. Defendant United Surgical Partners International, Inc. is a company organized and
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`existing under the laws of Delaware with its principal place of business at 14201 Dallas
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`Parkway, Dallas, Texas, 75254. United Surgical Partners International, Inc. is a wholly owned
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`subsidiary of Defendant Tenet.
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`17. Defendant Tenet Healthcare Corporation (“Tenet”) is a company organized and existing
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`under the laws of Nevada with its principal place of business at 14201 Dallas Parkway, Dallas,
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`Texas 75254. Tenet, through its many subsidiaries, owns and operates outpatient medical
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`facilities throughout the United States. Tenet is a public company traded on the New York Stock
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`Exchange under the symbol “THC.” Tenet is the parent corporation of USPI. On June 16, 2015,
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`Tenet completed a transaction that combined its freestanding ambulatory surgery and imaging
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`center assets with the surgical facility assets of USPI. In April 2016, Tenet paid $127 million to
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`purchase additional shares, which increased its ownership interest in USPI from 50.1% to
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`approximately 56.3%. In July 2017, Tenet paid $716 million for the purchase of additional
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`shares, which increased its ownership interest in USPI to 80.0%. In April 2018, Tenet paid
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`approximately $630 million for the purchase of an additional 15% ownership interest in USPI,
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`which increased its ownership interest in USPI to 95%.
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`18. Defendants United Surgical Partners Holding Company, Inc., United Surgical Partners
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`International, Inc., and Tenet Healthcare Corporation are collectively referred to as “USPI.”
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`USPI “is the largest ambulatory surgery platform in the country,” owns and operates over 550
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`outpatient medical facilities and other facilities, employs 110,000 people, partners with
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`approximately 5,000 physicians, and serves 10 million patients annually in 28 states. USPI was
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`“founded with a promise to deliver high-quality, lower-cost solutions for [its] communities.”
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`19. John Does 1-10 are persons and entities that conspired with SCA as described herein.
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`They include, at a minimum, “Company B.” The identity of the John Doe Defendants cannot be
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`known without discovery from SCA. Plaintiff will request leave to amend this complaint upon
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`learning the identity of the John Doe Defendants during appropriate discovery.
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`20. “Company B” is a company organized and existing under the laws of Delaware with its
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`principal place of business in Denver, Colorado. “Company B” owns and operates outpatient
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`medical care facilities across the United States and employs individuals to operate its business at
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`its headquarters location and at other location across the United States.
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`GOVERNMENT INVESTIGATION
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`21. The United States Department of Justice issue a press release on January 7, 2021
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`confirming the existence of the conspiracy and announcing a criminal indictment against SCA.
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`That indictment references two co-conspirator companies—“Company A” and “Company B.”
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`See Indictment, United States v. Surgical Care Affiliates, LLC, No. 3:21-cr-00011 (N.D. Tex.)
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`(filed Jan. 5, 2021). Upon information and belief, Plaintiff alleges that “Company A” refers to
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`USPI. The indictment alleges that “Individual 1” also participated in the conspiracy.
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`AGENTS AND CO-CONSPIRATORS
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`22. The anticompetitive and unlawful acts alleged against Defendants in this Class Action
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`Complaint were authorized, ordered or performed by the Defendants’ respective officers, agents,
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`employees, representatives, or shareholders while actively engaged in the management,
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`direction, or control of the Defendants’ businesses or affairs.
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`23. The Defendants’ agents operated under the explicit and apparent authority of their
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`principals.
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`24. The Defendants, through their subsidiaries, affiliates and agents operated as a single
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`unified entity.
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`25. Various persons and/or firms not named as Defendants herein may have participated as
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`co-conspirators in the violations alleged herein and may have performed acts and made
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`statements in furtherance thereof. These include, at a minimum, “Company B” named in the
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`Indictment, which is a company organized and existing under the laws of Delaware with its
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`principal place of business in Denver, Colorado. “Company B” owns and operates outpatient
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`medical care facilities across the United States and employs individuals to operate its business at
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`its headquarters location and at other location across the United States.
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`26. Each Defendant acted as the principal, agent or joint venture of, or for other Defendants
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`with respect to the acts, violations, and common course of conduct alleged herein.
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`INDUSTRY BACKGROUND
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`27. During the Class Period, medical costs accounted for a substantial percentage of spending
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`in America. The United States spent $2.7 trillion on healthcare in 2011, according to Centers for
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`Medicare and Medicaid Services (“CMS”), and the percentage of gross domestic product
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`devoted to healthcare increased from 7.2% in 1970 to 17.9% in 2011. According to SCA’s 2014
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`SEC filings, surgical delivery was one of the largest components of medical costs in the United
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`States, representing approximately 30% of medical spending for individuals with commercial
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`insurance.
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`28. At the same time, the healthcare industry was in the midst of a transition characterized by
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`increased focus on cost containment and clinical outcomes, driven by regulatory efforts and new
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`payment and delivery models, such as Accountable Care Organizations (“ACOs”).
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`29. These measures led to an increase in outpatient surgeries. According to the American
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`Hospital Association, from 1991 to 2011, outpatient surgeries increased from 52.3% of total
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`surgery volumes to 64.2%. In addition, a significant share of outpatient surgeries shifted from
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`hospitals to free-standing facilities over a similar period. Advancements in medical technology,
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`such as lasers, arthroscopy, fiber optics and enhanced endoscopic techniques, reduced the trauma
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`of surgery and the amount of recovery time required by patients following certain surgical
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`procedures. Improvements in anesthesia also shortened the recovery time for many patients by
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`minimizing post-operative side effects such as nausea and drowsiness, thereby avoiding, in some
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`cases, overnight hospitalization. These medical advancements significantly increased the number
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`of procedures that could be performed in a surgery center and fueled the migration of surgical
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`procedures out of hospitals and into outpatient settings.
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`30. The transition to outpatient care led to a consolidation in the market as provider networks
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`sought to buy up competition. In 2015, Tenet purchased a 50.1% stake in USPI and completed its
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`purchase in 2018. The combined company operated 244 ambulatory surgery centers, 16 short-
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`stay surgery hospitals and 20 imaging centers in 29 states. In 2016, Envision merged with
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`AmSurg to create a $10 billion enterprise that owned and operated 260 surgery centers and one
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`surgical hospital in 35 states and the District of Columbia. In 2017, United purchased SCA for
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`$2.3 billion in 2017, creating a network that services about 1 million patients a year across 30
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`states.
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`31. These companies dominated the outpatient medical care market and were driven by
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`investors to maximize profit. At the same time, constituents across the healthcare continuum,
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`including government payors, private insurance companies and self-insured employers,
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`implemented cost containment measures. Insurance providers created networks to drive down
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`medical care costs, reimbursing care from only those providers that met cost containment
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`measures. This meant that despite consolidation in the outpatient medical care market, these
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`companies’ revenue was constrained by powerful buyers (insurance companies) that limited
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`reimbursements.
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`32. To increase profits, outpatient medical care centers had incentive to decrease costs at the
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`place with least resistance—employee wages. Since the 1970s, the United States has experienced
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`slow wage growth and rising inequality, a trend that has accelerated over the last fifteen years.
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`Unemployment is at historic lows and job openings are at an all-time high, yet wage growth has
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`remained sluggish and has not kept pace with increased productivity in the labor market.
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`33. Several factors contribute to this trend, including market concentration of employers and
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`employer collusion. Labor markets are inherently inelastic (unresponsive to changes in price)
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`because employees cannot easily respond to stagnant or decreasing wages. Labor is “an
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`extremely perishable commodity” because “an hour not worked today can never be recovered.”
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`Thus, collusion amongst employers is especially effective because employees cannot easily
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`switch to another employer to mitigate the wages already lost. To correct these market
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`inefficiencies, federal and state antitrust enforcers have begun to take particular focus on
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`anticompetitive conduct in labor markets in recent years.
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`FACTUAL ALLEGATIONS
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`34. Defendants, in an effort to reduce costs, sought to artificially depress employee wages
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`through an anticompetitive conspiracy. Over a period spanning at least the years 2010 through
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`2017, Defendants entered agreements not to solicit senior-level employees. This type of
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`conspiracy is known as a “no-poach” agreement. These no-poach agreements were executed and
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`enforced by the companies’ most senior executives. The no-poach agreements suppressed
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`competition for the services of senior-level employees, and were not reasonably necessary to any
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`separate, legitimate business transaction or collaboration among the companies.
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`35. Defendants participated in meetings, conversations, and communications to discuss the
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`no-poach agreements, and agreed during those meetings, conversations, and communications not
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`to solicit each other’s senior-level employees.
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`36. For example, on or about May 14, 2010, the CEO of USPI emailed other employees of
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`USPI: “I had a conversation w [Defendant Hayek] re people and we reached agreement that we
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`would not approach each other’s proactively.”
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`37. On or about October 20, 2014, the CEO of Company B emailed Defendant Hayek the
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`following: “Someone called me to suggest they reach out to your senior biz dev guy for our
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`corresponding spot. I explained I do not do proactive recruiting into your ranks.”
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`38. Defendants told certain executives, employees, and recruiters to avoid soliciting senior-
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`level employees of each other’s companies. For example, on or about November 11, 2013, a
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`senior human resources employee at USPI told a recruiter the following: “Please do not schedule
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`a call w/ [candidate], thanks. She would have had to apply for the job first. We cannot reach out
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`to SCA folks. Take any SCA folks off the list.”
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`39. On or about December 12, 2015, SCA’s human resources executive instructed a recruiter
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`to “note that [USPI] and [Company B] are off limits to SCA.”
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`40. Defendants told each other’s senior-level employees who were candidates for
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`employment at the other companies that they were required to notify their current employer to
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`that effect. For example, on or about November 1, 2013, employees of USPI discussed whether
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`to interview a candidate employed by SCA considering the “verbal agreement with SCA to not
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`poach their folks ….” The CEO of USPI disclosed that “[w]e do have that agreement and want to
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`stick by it. If [candidate] indeed did approach us, and is willing to tell Defendant Hayek] that I’m
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`ok.” The senior human resources officer at USPI responded: “Yikes, she is not going to want to
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`do that. But I will check.”
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`41. On or about April 26, 2016, SCA’s human resources executive emailed a candidate from
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`Company B that she could not recruit from Company B, with the exception of “candidates [who]
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`have been given explicit permission by their employers that they can be considered for
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`employment with us.”
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`42. On or about October 16, 2015, Defendant Hayek emailed a SCA human resources
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`executive: “Putting two companies in italics ([USPI] and [Company B]) - we can recruit junior
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`people (below Director), but our agreement is that we would only speak with senior executives if
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`they have told their boss already that they want to leave and are looking.”
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`43. Defendants alerted their co-conspirators when each other’s senior-level employees were
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`recruited, and policed violations of the conspiracy. For example, on or about December 8, 2015,
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`the CEO of USPI informed the Defendant Hayek: “Just wanted to let you know that [recruiting
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`company] is reaching out to a couple of our execs. I’m sure they are not aware of our
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`understanding.” Defendant Hayek told other SCA executives: “We should continue to flag
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`[USPI] on our ‘do not call’ list to recruiters - is [sic] OK if we get an inbound inquiry and the
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`leader has communicated within [USPI] that they want to leave, but outbound calls should not be
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`occurring.”
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`44. On or about June 13, 2016, an employee of SCA forwarded news of a recruitment, noting
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`that: “I thought there was a gentlemen’s agreement between us and [Company B] re: poaching
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`talent.” An SCA officer replied: “There is. Do you mind if I share with [Defendant Hayek], who
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`has most recently addressed this with [Company B’s CEO].” Defendant Hayek relayed the news
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`to Company B’s CEO, who replied “Will check it out.”
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`45. Defendants refrained from soliciting each other’s senior-level employees. For example,
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`on or about July 17, 2017, a human resources employee of USPI, believing a candidate to be
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`employed by SCA, emailed a recruiting coordinator for USPI that, although the candidate
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`“look[ed] great” she “can’t poach her.”
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`46. On or about April 7, 2017, Defendant Hayek was contacted by a consultant regarding his
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`interest in a candidate employed by Company B, and responded: “In order to pursue [candidate],
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`he would need to have already communicated that he is planning to leave [Company B] — that’s
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`the relationship that we have with [Company B].” The consultant responded, “. . . I’m glad you
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`arrived at that agreement with [Company B’s CEO].”
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`CLASS ALLEGATIONS
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`47. Plaintiff brings this action for damages and injunctive relief on behalf of himself and as a
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`class action pursuant to Federal Rules of Civil Procedure, Rule 23(a), (b)(2) and (b)(3), on behalf
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`of a similarly situated Class, which is defined, as follows:
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`All natural persons who worked in senior-level positions in the
`United States for one or more of the following: (a) from May 1, 2010
`to October 31, 2017 for Surgical Care Affiliates, LLC or one of its
`subsidiary outpatient medical care facilities; (b) from May 1, 2010
`to October 31, 2017 for United Surgical Partners Holding Company,
`Inc., United Surgical Partners International, Inc. or one of its
`subsidiary outpatient medical care facilities; or (c) from February 1,
`2012 to July 31, 2017 for Company B, or one of its subsidiary
`outpatient medical care facilities (the “Class Period”).
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`This definition specifically excludes the following person or entities:
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`a.
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`b.
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`c.
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`d.
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`e.
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`f.
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`Any of the Defendants named herein;
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`Any of the Defendants’ co-conspirators;
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`Any of Defendants’ parent companies, subsidiaries, and affiliates;
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`Any of Defendants’ senior corporate officers, including Chief Executive
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`Officers, Chief Financial Officer, or Chief Operating Officer;
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`All governmental entities;
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`The judges and chambers staff in this case, as well as any members of
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`their immediate families; and
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`g.
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`Senior corporate officers and personnel in the human resources, recruiting,
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`and legal departments of SCA, USPI, or Company B.
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`48. Based on the Indictment, the term “senior-level” as used throughout this complaint and in
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`the proposed Class Definition includes, at a minimum, those with the title of Director or higher,
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`as well as the top administrators at each outpatient medical care facility, such as Chief Nursing
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`Officers. The term does not include the senior corporate officers of each Defendant.
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`49. Plaintiff does not know the exact number of Class members, because such information is
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`in the exclusive control of Defendants. Plaintiff is informed and believes that, due to the nature
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`of the trade and commerce involved, there are thousands of Class members geographically
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`dispersed throughout the United States and elsewhere, such that joinder of all Class members in
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`the prosecution of this action is impracticable.
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`50. Plaintiff’s claims are typical of the claims of his fellow Class members because Plaintiff
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`was employed by SCA as a senior-level employee during the Class Period, Plaintiff and all Class
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`members were damaged by the same wrongful conduct of Defendants as alleged herein, and the
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`relief sought herein is common to all members of the Class.
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`51. Numerous questions of law or fact common to the entire Class—including, but not
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`limited to those identified below—arise from Defendants’ anticompetitive and unlawful conduct:
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`a. Whether Defendants agreed not to solicit or hire each other’s senior-level
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`employees;
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`b. Whether such agreements were per se violations of the Sherman Act;
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`c. Whether Defendants have fraudulently concealed their misconduct;
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`d. Whether and the extent to which Defendants’ conduct suppressed compensation
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`below competitive levels for their senior-level employees;
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`e. Whether Plaintiff and the Class suffered antitrust injury because of Defendants’
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`agreements; and
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`f. The type and measure of damages suffered by Plaintiff and the Class.
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`52. These and other questions of law and fact are common to the Class and predominate over
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`any questions affecting the Class members individually.
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`53. Plaintiff will fairly and adequately represent the interests of the Class because he was
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`employed by SCA as a senior-level employee during the Class Period and does not have
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`conflicts with any other members of the Class. Furthermore, Plaintiff has retained sophisticated
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`and competent counsel who is experienced in prosecuting no-poach class actions, as well as
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`price-fixing and other complex litigation.
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`54. Defendants have acted on grounds generally applicable to the Class, thereby making final
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`injunctive relief appropriate with respect to the Class as a whole.
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`55. This class action is superior to alternatives, if any, for the fair and efficient adjudication
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`of this controversy. Prosecuting the claims pled herein as a class action will eliminate the
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`possibility of repetitive litigation. There will be no material difficulty in the management of this
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`action as a class action.
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`56. The prosecution of separate actions by individual Class members would create the risk of
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`inconsistent or varying adjudications, establishing incompatible standards of conduct for
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`Defendants.
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`ANTICOMPETITIVE EFFECTS AND LACK OF PROCOMPETITIVE
`JUSTIFICATION
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`57. The conspiracy substantially reduced competition for labor. Defendants and the unnamed
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`co-conspirators entered, implemented and policed these agreements with the knowledge of the
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`overall conspiracy, and did so with the intent and effect of fixing, restraining and stabilizing the
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`compensation paid to their personnel at artificially low levels.
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`58. Defendants adhered to a policy of internal equity. Internal equity is the comparison of
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`positions within a business under which businesses generally compensate workers of similar title
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`and job descriptions equivalently. Under application of principles of internal equity, changes in
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`compensation will be experienced broadly across an organization. The conspiracy reduced
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`competition across the employees of Defendants and their co-conspirator firms such that
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`compensation and mobility was decreased broadly across them.
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`59. The harm not only reached individuals who sought to change their employment from one
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`company to another, but also extended to those who had no intention of changing companies,
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`due to, inter alia, the Defendants’ efforts to maintain internal equity in their compensation
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`structures, as well as the reduction of transparency.
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`60. The conspiracy constitutes a per se violation of the Sherman Act because there were
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`naked restraints on trade that lacked any redeeming virtue.
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`61. In the alternative, Defendants are liable under a “quick look” analysis where one with
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`even a rudimentary understanding of economics could conclude that the arrangements and
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`agreements alleged would have an anticompetitive effect on class members and markets.
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`62. In the alternative, Defendants are liable under a “rule of reason” analysis because they
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`exploited their collective market power in the market for senior-level employees in outpatient
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`medical care facilities in the United States and there are no procompetitive effects.
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`63. Even if there were purported procompetitive effects—which there are not—these effects
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`could be achieved by less restrictive alternatives and are outweighed by the anticompetitive
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`harm. For example, in many states, employers can use non-compete clauses to protect
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`investments they have made in senior-level employees. Unlike employee noncompete clauses,
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`employer no-poach agreements operate at the employer level, and employees are not parties to
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`such agreements or necessarily aware of them, although they can limit their opportunities. No-
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`poach agreements, therefore, may cause employees to stay with the company longer than they
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`otherwise would have under the false belief that they are being turned away from other jobs due
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`to their lack of qualifications.
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`64. In addition, any procompetitive effects that may have resulted from the conspiracy
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`and/or the conduct of Defendants and their agents and coconspirators in furtherance thereof were
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`and are outweighed by the anticompetitive harm alleged herein, including but not limited to
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`restricting employee mobility and suppressing wages, benefits and other aspects of
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`compensation.
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`MARKET DEFINITION AND MARKET POWER
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`65. While the theory of labor supply and demand proves somewhat useful to describe the
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`interaction between workers offering their skills and employers looking to fill spots- and the
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`concurrent determination of wages, economists have argued that due to so-called market
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`imperfections, special emphasis needs to be placed in firms’ potential monopsony power, search
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`costs, training and human capital investments and geographical mobility.
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`66. In general, the labor market is the overarching term that economists use for all the
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`different markets for labor, maintaining that there is no single labor market but rather different
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`ones for every different type of labor that share certain similarities. For example, labor differs by
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`type of work, skill level, and location but is similar in that wages tend to be “sticky” (they do not
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`change much throughout a worker’s lifetime), almost never go down, and workers tend to be
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`paid progressively more for more years of education and training. While each labor market is
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`different, they all tend to operate in similar ways and are heavily related to the state of the
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`economy in general. For example, when wages go up in one labor market, they tend to go up in
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`others too.
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`67. In a perfectly competitive labor market, the supply and demand for jobs meet at an
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`equilibrium price (i.e. wage), with the workers providing the services that employers demand.
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`The worker offers her services for compensation while the employer needs an individual to do