The Department of Justice (DOJ) recently accused a surgical group out of Texas of illegal collusion with competitors. According to the feds, the group agreed not to poach senior-level employees from competing practices. The group is composed of physicians who own and operate outpatient medical care centers. In response to the DOJ’s allegations, the group filed a brief with the court stating the case is unlawful and the court should throw it out.
What law is at issue here?
In this case, the government claims the physician group violated the Sherman Act. The Sherman Act is an antitrust law enacted by Congress to address concentrations of power that could have a negative impact on the marketplace. Congress intended this law to help encourage free competition.
If the government can support these allegations, they could have a successful case.
What is the group’s counter argument?
The group countered that the DOJ’s arguments are based on actions that occurred almost a decade earlier. During this time, the group was under different ownership.
They also claim that the process used by the government to make these allegations is a violation of the group’s right to due process. Essentially, this argument is based on the fact that the Sherman Act generally requires fair warning before criminal prosecution is allowed. The group states there is no precedent finding the non-solicitation agreements at issue in this case illegal. As such, they claim the use of the Sherman Act unlawful.
What penalties come with these types of allegations?
A Sherman Act violation is serious and can come with up to $1 million fine. We will watch how the case progresses and provide updates as they become available.