Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 1 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 1 of 35
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`UNITED STATES DISTRICT COURT
`
`MIDDLE DISTRICT OF PENNSYLVANIA
`
`Case No.
`
`CLASS ACTION COMPLAINT
`
`DEMAND FOR JURY TRIAL
`
`NICHOLE LEIB, KEVIN
`
`BROKENSHIRE, and DIANE
`
`WEIGLEY, individually and on behalf
`of all others similarly situated,
`
`Plaintiffs,
`
`V.
`
`GEISINGER HEALTH and
`
`EVANGELICAL COMMUNITY
`
`HOSPITAL,
`
`Defendants.
`
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 1 of 35
`
`UNITED STATES DISTRICT COURT
`
`MIDDLE DISTRICT OF PENNSYLVANIA
`
`Case No.
`
`CLASS ACTION COMPLAINT
`
`DEMAND FOR JURY TRIAL
`
`NICHOLE LEIB, KEVIN
`
`BROKENSHIRE, and DIANE
`
`WEIGLEY, individually and on behalf
`of all others similarly situated,
`
`Plaintiffs,
`
`V.
`
`GEISINGER HEALTH and
`
`EVANGELICAL COMMUNITY
`
`HOSPITAL,
`
`Defendants.
`
`
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 2 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 2 of 35
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`Plaintiffs Nichole Leib, Kevin Brokenshire, and Diane Weigley
`
`(“Plaintiffs”), individually and on behalf of a class of similarly situated individuals,
`
`bring this action for damages and injunctive relief under the antitrust laws of the
`
`United States and the laws of the Commonwealth of Pennsylvania against
`
`Geisinger Health (“Geisinger”) and Evangelical Community Hospital
`
`(“Evangelical”) (collectively, “Defendants”).
`
`I.
`
`SUMMARY OF THE ACTION
`
`1.
`
`This class action challenges an illegal agreement between two
`
`competitors, Geisinger and Evangelical, not to recruit (or “poach”) each other’s
`
`physicians, nurses, psychologists, therapists, and other healthcare professionals
`
`(“Healthcare Workers”) (the “No-Poach Agreement”).
`
`2.
`
`The No-Poach Agreement covered Defendants’ Healthcare Workers
`
`in a region in central Pennsylvania that includes Union, Snyder, Northumberland,
`
`Montour, Lycoming, and Columbia counties, and the cities of Danville and
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`Lewisburg, where Geisinger Medical Center and Evangelical are headquartered,
`
`respectively (“Central Pennsylvania”). The following map depicts the relevant
`
`Central Pennsylvania geographic region:
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 3 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 3 of 35
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`Hospitals in Central Pennsylvania
`
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`
`Notes:
`a) Hospitals are sized on number of discharges.
`b) Discharges exclude psychiatry and drug rehabilitation discharges.
`Normal newborn discharges are also excluded to avoid double counting with the mother.
`cl The GMC marker size reflects combined discharges tor GMC and Shamokin Acute Care Hospital
`The Shamokin marker indicates only the location of the hospital, not its number of discharges.
`d) Hospitals indicated as Other do not share ownership with one another.
`
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`
`Source: Complaint ll 47, United States v. Geisinger Health, et al., No. 4:20-cv-
`
`01383-MWB,_ (M.D. Pa. Aug. 5, 2020) (“DOJ Compl.”).
`
`3.
`
`This No-Poach Agreement was intended to, and did, reduce
`
`competition for Healthcare Workers in Central Pennsylvania and, as a result,
`
`suppressed the job mobility and wages of Plaintiffs and the members of the
`
`proposed Class (defined below) below the levels that would have prevailed but for
`
`the illegal No-Poach Agreement.
`
`
`
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`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 4 of 35
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`4.
`
`The Department of Justice (“DOJ”) has recently issued the following
`
`guidance about the anticompetitive effects of no-poach agreements like the one at
`
`issue in this case: “When companies agree not to hire or recruit one another’s
`
`employees, they are agreeing not to compete for those employees’ labor. Robbing
`
`employees of labor market competition deprives them ofjob opportunities,
`
`information, and the ability to use competing offers to negotiate better terms of
`
`employment. Under the antitrust laws, the same rules apply when employers
`
`compete for talent in labor markets as when they compete to sell goods and
`
`services.”1
`
`5.
`
`Geisinger and Evangelical reached their unlawful horizontal
`
`agreement at the highest levels of their organizations, through secretive verbal
`
`exchanges that were later confirmed by emails, which they agreed to conceal from
`
`outsiders, their respective employees who make up the proposed Class, and the
`
`public. As described below, Defendants” senior executives periodically reaffirmed,
`
`monitored, and policed the No-Poach Agreement.
`
`6.
`
`The No-Poach Agreement began by May 2015, likely existed earlier
`
`than May 2015, and continued until at least August 5, 2020, when the DOJ brought
`
`1 See No-Poach Approach, Depft'of JusticeAntitrustDiv. (Sept. 30, 2019 ,
`https://www.Justlce.gov/atr/d1v1s1on-o erations/d1v1s10n—update-spring-2 l9/no-
`poach—approach (last v1s1ted Feb. 1, 2 21).
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 5 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 5 of 35
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`a civil antitrust action to enjoin Geisinger’s partial acquisition of Evangelical. See
`
`DOJ Compl.
`
`7.
`
`The DOJ Complaint alleges that Geisinger’s proposed partial
`
`acquisition of Evangelical would fundamentally reduce competition for healthcare
`
`services and raise the likelihood of continued unlawful coordination between
`
`Defendants. Id. 1] 6. The DOJ complaint alleges a history of collusion between
`
`Defendants—that Geisinger and Evangelical have a history of “picking and
`
`choosing when to compete with each other”—including that Defendants’ senior
`
`executives entered into the No-Poach Agreement that is the focus of this case. Id.
`
`111] 40-42.
`
`8.
`
`Geisinger and Evangelical took affirmative steps to conceal their
`
`unlawful No-Poach Agreement from Plaintiffs, the Class, and the general public.
`
`For example, at one time during the class period on Geisinger’s website, it
`
`advertised: “For your hard work, you’ll be rewarded with a competitive salary and
`
`a comprehensive benefits package, including health insurance, compensated
`
`vacation time and holidays, a 401(k) plan and more.” It now states that: “Our
`
`competitive compensation and benefits package helps you and your loved ones
`
`stay healthy, meet your financial goals and thrive professionally and personally.”2
`
`Similarly, Evangelical’s website advertises, “Great benefits and competitive salary
`
`2 “Benefits,” Geisinger Health, https://www.geisingerjobs.org/geisinger-benefits
`(last visited Feb. 1, 2021).
`
`
`
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`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 6 of 35
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`with partnership track.”3 Defendants did not disclose on their respective websites
`
`(or anywhere else) that they had an agreement not to compete for each other’s
`
`employees. Defendants’ salaries were not “competitive” because they were not
`
`competing with each of their main sources of competition for labor—namely, each
`
`other—and thus were able to pay less-than-competitive wages to their Healthcare
`
`Workers.
`
`9.
`
`Geisinger and Evangelical monitored each other’s compliance with
`
`the unlawful No-Poach Agreement and communicated regarding deviations from it
`
`in order to enforce compliance. For instance, after learning that Geisinger
`
`potentially took actions contrary to the No-Poach Agreement by recruiting nurses,
`
`Evangelical’s CEO wrote to her counterpart at Geisinger, asking, “Can you please
`
`ask that this stop[?] Very counter to what we are trying to accomplish.” DOJ
`
`Compl. 1] 42. Upon receiving this message, the Geisinger executive forwarded the
`
`email to Geisinger’s Vice President of Talent Acquisition, instructing her to “ask
`
`your staff to stop this activity with Evangelical.” Id.
`
`10.
`
`The No-Poach Agreement was made and enforced privately,
`
`confidentially, and at the highest levels of the organizations, and thus, Geisinger
`
`and Evangelical were successfully able to conceal the No-Poach Agreement from
`
`3 “Meaningful relationships: It’s who we are.” Evangelical Community Hospital,
`https://www.evanhospital.com/data/uploads/contentblock/Careers-radiology.pdf
`(last visited Feb. 1, 2021).
`
`
`
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`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 7 of 35
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`Plaintiffs and the members of the Class. But for the DOJ’s investigation of a
`
`proposed acquisition between the Defendants, and the resulting publication of the
`
`DOJ Complaint exposing the No-Poach Agreement, the existence of the
`
`anticompetitive No-Poach Agreement might have remained permanently hidden.
`
`11. Ultimately, the No-Poach Agreement reduced competition for
`
`Healthcare Workers and, as a result, it reduced Plaintiffs’ job mobility and enabled
`
`Defendants to pay their employees, including members of the Class, less than they
`
`would have been paid absent the No-Poach Agreement. The No-Poach Agreement
`
`is a per se unlawful restraint of trade under the federal antitrust laws, violated
`
`Pennsylvania law, and injured Plaintiffs and the members of the Class.
`
`II.
`
`JURISDICTION AND VENUE
`
`12.
`
`Plaintiffs bring this action to recover treble damages, costs of suit, and
`
`reasonable attorneys’ fees, arising from Geisinger’s and Evangelical’s Violations of
`
`Section 1 of the Sherman Act,_, and Pennsylvania’s Unfair Trade
`
`Practices and Consumer Protection Law, 73—
`
`13.
`
`The Court has subject matter jurisdiction pursuant to Sections 4 and
`
`16 of the Clayton Act,_ and I, and_, -, and
`
`-.
`
`14. Venue is proper in this judicial district pursuant to Section 12 of the
`
`Clayton Act,—, and_, -, and - because a
`
`
`
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`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 8 of 35
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`substantial part of the events giving rise to Plaintiffs’ claims occurred in this
`
`District, a substantial portion of the affected interstate trade and commerce was
`
`carried out in this District, and both Geisinger and Evangelical are headquartered
`
`in this District.
`
`III. THE PARTIES
`
`15.
`
`Plaintiff Nichole Leib is a citizen and resident of the state of
`
`Pennsylvania. Ms. Leib has worked as a registered nurse at Geisinger Medical
`
`Center in Danville, Pennsylvania since July 2011 and worked in the operating
`
`room since April 2014. Ms. Lieb was injured in her business or property by reason
`
`of the violation alleged herein.
`
`16.
`
`Plaintiff Kevin Brokenshire is a citizen and resident of the state of
`
`Pennsylvania. Mr. Brokenshire worked as a registered nurse in the operating room
`
`at Geisinger Medical Center in Danville, Pennsylvania, from 2008 to March 2018.
`
`Mr. Brokenshire was injured in his business or property by reason of the violation
`
`alleged herein.
`
`17.
`
`Plaintiff Diane Weigley is a citizen and resident of the state of
`
`Georgia. Ms. Weigley worked as a registered nurse at Evangelical Community
`
`Hospital in Lewisburg, Pennsylvania, from March 2014 to August 2017. Ms.
`
`Weigley was injured in her business or property by reason of the violation alleged
`
`herein.
`
`
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`18. Defendant Geisinger is the largest health system in Central
`
`Pennsylvania. It is an integrated healthcare provider of hospital and physician
`
`services headquartered in Danville, Pennsylvania. Geisinger employs
`
`approximately 32,000 employees, including 1,800 physicians and 5,000 nurses.
`
`Geisinger Medical Center, located in Danville, Pennsylvania, is Geisinger’s
`
`flagship hospital. It is licensed to accommodate 574 overnight patients. Geisinger
`
`operates three other hospitals in Central Pennsylvania: Geisinger Shamokin,
`
`Geisinger Jersey Shore, and Geisinger Bloomsburg. Geisinger also operates urgent
`
`care centers and other outpatient facilities in Pennsylvania.
`
`19. Geisinger has a history of acquiring community hospitals in
`
`Pennsylvania. Geisinger acquired six hospitals in Pennsylvania from 2012 to 2017.
`
`Three of the four hospitals that Geisinger owns in Central Pennsylvania—
`
`Shamokin, Jersey Shore, and Bloomsburg—were formerly independent hospitals
`
`and two of those hospitals were the subject of previous antitrust challenges by the
`
`government.
`
`20. Defendant Evangelical is the largest independent community hospital
`
`in Central Pennsylvania and is headquartered in Lewisburg, Pennsylvania.
`
`Evangelical employs approximately 1,800 employees, including approximately
`
`170 physicians and 400 nurses. The hospital is licensed to accommodate 132
`
`overnight patients. Evangelical also owns numerous physician practices in Central
`
`
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`Pennsylvania and operates an urgent care center and several other outpatient
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`facilities.
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`21. Defendants acted as the principals of or agents for the unnamed co-
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`conspirators with respect to the acts, violations, and common course of conduct
`
`alleged herein.
`
`22. Various persons, partnerships, sole proprietors, firms, corporations
`
`and individuals not named as defendants in this lawsuit, and individuals, the
`
`identities of which are presently unknown, have participated as co-conspirators
`
`with Defendants in the offenses alleged in this Complaint and have performed acts
`
`and made statements in furtherance of the No-Poach Agreement and other
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`anticompetitive conduct.
`
`23. When this Complaint refers to any act, deed or transaction of any
`
`corporation or limited liability entity, the allegation means that the corporation or
`
`limited liability entity acted by or through its officers, directors, agents, employees
`
`or representatives while they were actively engaged in the management, direction,
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`or of the corporation’s or limited liability entity’s business.
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`
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`IV.
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`FACTUAL ALLEGATIONS
`
`A.
`
`Trade and Commerce
`
`24. During the Class Period (defined below), Geisinger and Evangelical
`
`employed members of the proposed Class in Pennsylvania, including in this
`
`District.
`
`25.
`
`The No-Poach Agreement has substantially affected interstate
`
`commerce throughout Pennsylvania and the United States and has caused antitrust
`
`injury throughout Pennsylvania and the United States.
`
`B.
`
`Geisinger and Evangelical Dominate Healthcare Services in
`Central Pennsylvania
`
`26. Geisinger is the largest health system in Central Pennsylvania, and
`
`Evangelical is the largest independent community hospital in Central
`
`Pennsylvania. No other company offers the scope of services and resources that
`
`Geisinger and Evangelical provide in Central Pennsylvania, and Defendants are the
`
`dominant employers of Healthcare Workers in Central Pennsylvania.
`
`27.
`
`For example, Geisinger and Evangelical both provide inpatient,
`
`general acute care services to patients in Central Pennsylvania. Geisinger accounts
`
`for approximately 55 percent and Evangelical accounts for approximately 17
`
`percent of inpatient general acute-care services provided in Central Pennsylvania
`
`for a total of 72 percent of that market. Defendants’ respective market shares for
`
`10
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`
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`many healthcare services are consistent with their market share for inpatient
`
`general acute care services.
`
`28.
`
`Consistent with Defendants’ dominance in providing healthcare
`
`services in Central Pennsylvania, Defendants are also the dominant employers of
`
`Healthcare Workers in Central Pennsylvania. Together, during the proposed Class
`
`Period, Defendants have employed approximately 70 to 75 percent of hospital
`
`Healthcare Workers in Central Pennsylvania. Defendants have also employed a
`
`dominant share of non-hospital Healthcare Workers in Central Pennsylvania.
`
`29. Geisinger and Evangelical both offer a wide range of medical care and
`
`support to patients across a range of specialties, including orthopedics, women’s
`
`health, surgical care, diabetes care, pain medicine, physical therapy, and primary
`
`care, among other areas. Indeed, Geisinger and Evangelical are aware that they
`
`compete to attract patients. Geisinger and Evangelical “care for the same people
`
`and populations[,]” according to a Geisinger Health Plan executive. “[I]f you don’t
`
`get your care here [at Evangelical], you get it there [at Geisinger][,]” Evangelical’s
`
`CEO explained in an interview. DOJ Compl. 1i 1.
`
`30.
`
`The competition between Geisinger and Evangelical to attract patients
`
`is reflected in their capital investment plans. The competition affects the capital
`
`investments each decides to make when engaging in business planning. When
`
`Evangelical’s CEO was justifying her recommendation of construction of a new
`
`11
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`orthopedic facility to Evangelical’s board of directors in 2016, for example, she
`
`explained that Evangelical was “vulnerable to GMC [Geisinger Medical Center] in
`
`orthopedics.” DOJ Compl. 1] 19. Similarly, Geisinger cited Evangelical’s
`
`competitive activities in considering capital expenditures for certain facility
`
`improvements in 2018.
`
`31.
`
`Because Geisinger and Evangelical are direct competitors in the
`
`provision of healthcare services in Central Pennsylvania, they would also
`
`ordinarily compete directly for the employment of Healthcare Workers. One
`
`important respect in which Defendants would have competed with each other
`
`would be through soliciting and/or hiring each other’s employees. Because of
`
`Defendants’ dominance as providers of healthcare to patients in Central
`
`Pennsylvania, Defendants are also the dominant employers of Healthcare Workers
`
`in Central Pennsylvania.
`
`32.
`
`Consequently, for those Healthcare Workers looking to work in
`
`healthcare in Central Pennsylvania, Geisinger and Evangelical are the largest and
`
`most important employers. Because Geisinger and Evangelical would vigorously
`
`compete for each other’s employees in the absence of the No-Poach Agreement,
`
`such competition would enhance more widespread discovery of salary information,
`
`increase job mobility and, as a result, increase the pay for all of Defendants’
`
`12
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`Healthcare Workers. Consequently, the reduction in competition through the No-
`
`Poach Agreement has broadly injured Plaintiffs and members of the Class.
`
`C.
`
`The Market for the Services of Healthcare Workers in Central
`
`Pennsylvania
`
`33.
`
`The No-Poach Agreement is per se illegal under the federal antitrust
`
`laws, and thus, there is no requirement to define the relevant product or geographic
`
`markets. As the DOJ made clear in guidance it issued in 2016: “Naked wage-fixing
`
`or no-poaching agreements among employers, whether entered into directly or
`
`through a third-party intermediary, are per se illegal under the antitrust laws.”4 But,
`
`to the extent a relevant market need be defined for any reason, it is for the services
`
`of Healthcare Workers in the Central Pennsylvania region.
`
`34. Healthcare Workers have specialized training and knowledge,
`
`including specialized schooling, advanced academic degrees, specialized
`
`occupational skills and knowledge, licensing and certification requirements, and
`
`specialized on-the-job training and experience.
`
`35. Defendants View Healthcare Workers as possessing important skills
`
`and experience that cannot readily be found in employees in other professional or
`
`occupational fields. One reason that Defendants entered into the illegal No-Poach
`
`Agreement was that retaining these Healthcare Workers would require increasing
`
`4 Antitrust Guidance for Human Resources Professionals at 3, Dep’t of Justice
`Antitrust Div. and Fed. Trade Comm’n (Oct. 2016)
`https://www.Justlce.gov/atr/file/9035l l/download (last visited Feb. 1, 2021).
`
`13
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`
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`financial retention incentives in a competitive market for Healthcare Workers’
`
`services. Conversely, limiting a primary source of competition for Healthcare
`
`Workers’ services Via a No-Poach Agreement allowed Defendants to pay lower
`
`wages to their Healthcare Workers than they would have paid absent the No-Poach
`
`Agreement.
`
`36.
`
`Because of the specialized training, knowledge, and skills, Healthcare
`
`Workers are more valuable to employers in the healthcare industry. Healthcare
`
`Workers would not view jobs in other professions or fields to be an adequate
`
`economic substitute for their jobs as Healthcare Workers. Indeed, because of the
`
`investments in education, certification, licensing, and other professional
`
`requirement and experience, it is expensive and difficult to become a Healthcare
`
`Worker, and Healthcare Workers cannot readily capitalize on those investments in
`
`other industries. Further, healthcare employers do not see employees from other
`
`industries as substitutes for Healthcare Workers.
`
`37. Defendants operate the dominant and most prominent healthcare
`
`facilities in Central Pennsylvania, and they are the dominant employers of
`
`Healthcare Workers in Central Pennsylvania. Additionally, given licensing,
`
`marketing, and professional contacts developed over time, Healthcare Workers
`
`tend to stay within a given geographic area for purposes of career development.
`
`14
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`38.
`
`Consequently, a small but substantial, non-transitory decrease or
`
`stagnation in pay will not cause Healthcare Workers in Central Pennsylvania to
`
`switch jobs outside of the healthcare industry in Central Pennsylvania. Nor would a
`
`small but substantial, non-transitory decrease or stagnation in pay cause Healthcare
`
`Workers in Central Pennsylvania to seek similar jobs outside of Central
`
`Pennsylvania.
`
`39. As alleged above, during the Class Period, Defendants collectively
`
`employed a dominant share of Healthcare Workers in Central Pennsylvania and
`
`thus together exercised monopsony power over the market for Healthcare Workers
`
`in Central Pennsylvania during the Class Period.
`
`D.
`
`Competition for Healthcare Workers in the Absence of a No-
`Poach Agreement
`
`40.
`
`In a properly functioning and lawfully competitive labor market,
`
`Geisinger and Evangelical would ordinarily aggressively compete for Healthcare
`
`Workers by recruiting and hiring from each other. Indeed, Geisinger’s flagship
`
`hospital (Geisinger Medical Center) and Evangelical are only approximately 17
`
`miles apart. As a result—but for the No-Poach Agreement—Geisinger and
`
`Evangelical would have been key competitors in the labor market for Healthcare
`
`Workers, and competition between them would have driven up compensation for
`
`Healthcare Workers.
`
`15
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`
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`41.
`
`Competition for Healthcare Workers through recruiting and lateral
`
`hiring has a significant impact on their compensation in several ways:
`
`42.
`
`First, when healthcare providers become aware of attractive outside
`
`opportunities for their Healthcare Workers, the threat of losing these employees to
`
`a competitor encourages an employer to preemptively increase compensation to
`
`increase morale and competitive positioning and ultimately to retain valuable
`
`labor. If certain healthcare providers do not react to competition, their Healthcare
`
`Workers may be receptive to recruiting by a rival employer or seek positions that
`
`offer more generous compensation and benefits elsewhere.
`
`43.
`
`Once a Healthcare Worker has received an offer from a rival
`
`employer, retaining that employee may require a disruptive increase in
`
`compensation for one individual. Increasing information and compensation for one
`
`person will have more widespread salary effects across a company and market.
`
`One such mechanism for this widespread effect is salary discovery, in which
`
`information about competing salaries causes higher compensation even among
`
`those employees not actively looking to switch employers. Another such
`
`mechanism is “internal equity” within organizations, where employers endeavor to
`
`maintain parity in pay levels across employees within the same categories as well
`
`as maintain certain compensation relationships among employees across different
`
`categories.
`
`16
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 18 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 18 of 35
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`44.
`
`In a market untainted by their anticompetitive coordination, Geisinger
`
`and Evangelical would have had an incentive to preempt lateral departures by
`
`paying their Healthcare Workers well enough that they would become less likely to
`
`seek or pursue outside opportunities. Preemptive retention measures would
`
`therefore have led to increased compensation for all Healthcare Workers.
`
`45.
`
`Second, the availability of desirable positions at competing employers
`
`forces employers to reactively increase compensation to retain Healthcare Workers
`
`who are likely to join a competitor. This can occur both when a particular
`
`Healthcare Worker or group of Healthcare Workers becomes interested in
`
`switching employers and the current employer responds by offering a
`
`compensation increase to retain them, or when an employer responds to overall
`
`attrition rates among its Healthcare Workers by increasing compensation levels. In
`
`the former scenario, even a targeted increase designed to retain specific Healthcare
`
`Workers will put upward pressure on the entire organization’s compensation
`
`structure.
`
`46.
`
`The positive compensation effects of hiring Healthcare Workers from
`
`competitors are not limited to the particular individuals who seek new employment
`
`or to the particular individuals who would have pursued new positions but for the
`
`No-Poach Agreement. Instead, the effects of a restraint in the labor market as a
`
`result of a No-Poach Agreement (and the effects of suppressing recruiting and
`
`17
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 19 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 19 of 35
`
`hiring pursuant to the No-Poach Agreement) commonly impact all individuals in
`
`positions subject to the restraint.
`
`47.
`
`Conversely, suppression of competition for cross-hiring and
`
`recruitment serves as a drag on compensation that permeates throughout an
`
`organization. The No-Poach Agreement enabled Geisinger and Evangelical to
`
`target the impact of their coordination on the employees most likely to command
`
`disruptive increases that, through processes of internal equity and salary discovery,
`
`would have led to increases that would have benefited all their employees.
`
`E.
`
`Geisinger and Evangelical’s Strategic Management of Their
`Healthcare Workers’ Compensation Levels
`
`48. Geisinger and Evangelical strategically managed their Healthcare
`
`Workers’ internal compensation levels to achieve certain objectives, including to:
`
`(a) Maximize both internal and external equity;
`
`(b) Maintain approximate compensation parity among Healthcare
`
`Workers within the same practices (e.g., Psychiatry, Hospital Medicine,
`
`Emergency Medicine, Community Medicine, Nursing) and seniority
`
`categories (e. g, those with two years or less experience, those with over two
`
`years of experience);
`
`(0) Maintain certain compensation relationships among Healthcare
`
`Workers across different categories (for example, among physicians relative
`
`to nurses or between the Psychiatry and Emergency Medicine practices);
`
`18
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 20 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 20 of 35
`
`((1) Avoid discrimination on the basis of race and gender;
`
`(e) Maintain high Healthcare Worker morale and productivity;
`
`(f)
`
`Retain Healthcare Workers; and
`
`(g) Attract new and talented Healthcare Workers.
`
`49.
`
`To accomplish these objectives, Geisinger and Evangelical set internal
`
`compensation levels for different Healthcare Workers categories that apply to all
`
`such employees within those categories. Defendants also compared compensation
`
`levels across different Healthcare Worker categories to ensure internal equity as
`
`between categories. Geisinger and Evangelical also regularly analyze and update
`
`their Healthcare Worker compensation structures in a process that involves the
`
`senior executives who entered into, implemented, and enforced the No-Poach
`
`Agreement.
`
`50. While Geisinger and Evangelical sometimes engaged in negotiations
`
`regarding compensation levels with individual Healthcare Workers, these
`
`negotiations occurred from a starting point of the pre-existing and pre-determined
`
`compensation level. The eventual compensation any particular Healthcare Worker
`
`receives is either entirely determined by the preset level or is materially influenced
`
`by it.
`
`51.
`
`Thus, if operating under competitive and lawful conditions, Geisinger
`
`and Evangelical would have recruited and hired Healthcare Workers from each
`
`19
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 21 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 21 of 35
`
`other, driving the pay for all workers in those classifications up through the
`
`mechanism of internal equity, in which employers endeavor to maintain parity
`
`within the organization among workers of similar job categories, or to maintain
`
`relative compensation relationships across job categories. Geisinger and
`
`Evangelical both understood this during the Class Period and avoided paying their
`
`Healthcare Workers more by entering into the No-Poach Agreement and by
`
`agreeing not to compete for employees.
`
`F.
`
`Geisinger and Evangelical Have a History of Coordination
`
`52. Defendants have a history of choosing when to compete with each
`
`other, which has deepened coordination at the expense of competition.
`
`Specifically, Geisinger and Evangelical have historically cooperated and sought
`
`out “wins” for both organizations at the expense of competition and their
`
`employees. As Evangelical’s CEO described in an interview discussing
`
`Geisinger’s proposed partial acquisition of Evangelical, “[T]here’s an economic
`
`principle called co-opetition. And you can cooperate, and you can compete. And as
`
`long as both sides find wins, it works.” DOJ Compl. 1] 27. Such statements
`
`epitomize how these close competitors have behaved in the past: They have
`
`coordinated their activities to “find wins” at the expense of robust competition. Id.
`
`Geisinger and Evangelical’s Healthcare Workers have been on the losing end of
`
`20
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 22 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 22 of 35
`
`this bargain as the No-Poach Agreement has suppressed competition for their labor
`
`as well as their pay.
`
`53.
`
`Furthermore, Evangelical has publicly stated that it already has
`
`cooperative relationships with Geisinger, which confirms that they have exchanged
`
`competitively sensitive information. In fact, as DOJ alleges in its Complaint
`
`seeking to block Geisinger’s equity stake in Evangelical, which is based on
`
`documentary evidence produced to the DOJ, Defendants have already shared
`
`important competitive information as part of the proposed partial acquisition that
`
`the DOJ seeks to enjoin. See DOJ Compl. 1] 38. Evangelical’s CEO sent her
`
`counterpart at Geisinger a document detailing her thinking on Evangelical’s
`
`strategic growth options in their discussions regarding joint ventures. Id.
`
`54.
`
`The history and prevalence of the coordination between Geisinger and
`
`Evangelical suggests that the No-Poach Agreement goes back many years.
`
`Moreover, there may have been other, similar agreements in light of Geisinger’s
`
`history of acquiring community hospitals in Pennsylvania. As alleged above,
`
`Geisinger acquired six hospitals in Pennsylvania from 2012 to 2017. Shamokin,
`
`Jersey Shore, and Bloomsburg—three of the four hospitals that Geisinger owns in
`
`Central Pennsylvania—were formerly independent hospitals and two of those
`
`hospitals were the subject of previous antitrust challenges by the government.
`
`21
`
`
`
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 23 of 35
`Case 4:21-cv-00196-MWB Document 1 Filed 02/03/21 Page 23 of 35
`
`55. Geisinger and Evangelical’s senior executives had “regular touch base
`
`meetings” in which they discussed various topics,
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