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UnitedHealth’s SCA Accused of Sherman Act Violations

— January 22, 2021

A federal grand jury indicted SCA for Sherman Act violations.

The Department of Justice (DOJ) Antitrust Division announced a federal grand jury returned a two-count indictment charging UnitedHealth’s Surgical Care Affiliates LLC (SCA), which runs outpatient medical centers nationwide, for colluding with competitors and agreeing not to hire senior-level employees.

The indictment was filed in the U.S. District Court for the Northern District of Texas, Dallas Division, and charges SCA with “entering into and engaging in two separate bilateral conspiracies with other health care companies to suppress competition between them for the services of senior-level employees, in violation of the Sherman Act.”

The Sherman Antitrust Act of 1890, passed by Congress, promotes free competition among those engaged in commerce.  It prevents companies from conspiring to gain the market.  A violation of the act can require a maximum penalty of a $100 million fine and can be increased to twice the gain from committing the crime or twice the loss suffered by those victimized.

UnitedHealth’s SCA Accused of Sherman Act Violations
Photo by Olga Kononenko on Unsplash

UnitedHealth’s SCA agreement has been in place since at least May 2010 and continued through October 2017.  Investigators found it conspired with a company based in Texas, “agreeing not to solicit each other’s senior-level employees.”  The indictment reads, “Beginning at least as early as February 2012 and continuing until at least as late as July 2017, SCA separately conspired with a company based in Colorado to allocate senior-level employees through a similar non-solicitation agreement.”

“The charges demonstrate the Antitrust Division’s continued commitment to criminally prosecute collusion in America’s labor markets,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “A freely competitive employment market is essential to the health of our economy and the mobility of American workers.  Along with our law enforcement partners, the division will ensure that companies who illegally deprive employees of competitive opportunities are not immune from our antitrust laws.”

“The charges demonstrate the FBI’s commitment to ensuring a free market and protecting opportunities for American workers,” said Steven M. D’Antuono, Assistant Director in Charge of the FBI Washington Field Office.  “The FBI will continue to work with our partners to root out this type of illegal activity and deter employer collusion that harms the American people and workers.”

“Companies competing for top-level talent is the bedrock of the American labor market,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas.  “The Northern District of Texas is proud to partner with the Antitrust Division to prosecute Sherman Act violations.”

SCA submitted a statement responding to the allegations, “The position taken by the government in this matter represents a novel application of the antitrust laws as they relate to employee recruitment, for which there is no precedent or foundation.  This matter involves alleged conduct seven years before UnitedHealth Group acquired SCA and does not involve any SCA ambulatory surgery centers, their joint owners, physician partners, current leadership or any other UnitedHealth Group companies.  SCA disagrees with the government’s position and will vigorously defend itself against these unjustified allegations.”

The language in the Sherman Act indicates it outlaws “every contract, combination, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.”


Health Care Company Indicted for Labor Market Collusion

UnitedHealth’s Surgical Care Affiliates indicted on allegations of collusion

Federal Trade Commission: The Antitrust Laws

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