DENVER (AP) — A jury on Friday acquitted Denver-based dialysis giant DaVita Inc. and former Chairman and CEO Kent Thiry of conspiring with three competing companies to withhold certain employees from each other, in violation of federal labor law.
The trial in federal court in Denver was the first of its kind by the Justice Department, which argued that agreements not to hire each other’s executives deprived workers of career opportunities in violation of the Sherman Anti-Farm Act. Trust, an 1890 law that attempts to curb activity that restricts competition in the marketplace.
Friday’s verdict came after two days of deliberations, The Denver Post reported.
A grand jury indicted DaVita, a leading provider of kidney dialysis services, and Thiry on three counts of conspiracy last year. The indictment alleged that DaVita and Thiry agreed with Surgical Care Associates, Hazel Health and Radiology Partners not to hire the top executives and other employees between 2012 and 2019.
DaVita and Thiry, supported by local and national business groups, argued that the non-solicitation agreements did not violate laws and that the government was applying an exaggerated, albeit novel, interpretation of the Sherman Antitrust Act.
Thiry led DaVita for two decades before stepping down as CEO in 2019.
Surgical Care Affiliates faces similar charges in federal court in Texas. He denies any irregularity.
DaVita faced a maximum penalty of $100 million per count if convicted, while Thiry faced a fine of up to $1 million per count and up to 10 years in prison.
Anthony Mariano, a Justice Department antitrust attorney, told the jury in closing arguments Wednesday that Thiry and DaVita defrauded employees of job opportunities and that Thiry used the threat of retaliation to prevent executives from leaving their company.
“This is not the story of a CEO who wants the best for his employees,” Mariano argued, according to the Post. “It’s the story of a CEO who wanted control.”
Employees generally didn’t know about the deals, Mariano said, inadvertently missing out on opportunities to advance their careers.
“Because Kent Thiry didn’t tell them anything, they never know when they’ve been scammed into a job opportunity,” Mariano said.
Former DaVita executives and a mid-level employee testified for the prosecution. The employee, Elliott Holder, said he didn’t take another job after being told he first had to tell his DaVita supervisor that he was looking for work.
Thiry did not testify during the trial. His attorney, Juanita Brooks, called the Justice Department case a “witch hunt.”
The defense’s sole witness, Pierre Cremieux, an economist with antitrust experience, testified that an analysis he conducted of compensation and executive turnover data showed no evidence of any deals that stifled opportunities for employees.
DaVita’s attorney, John Dodds, argued that asking employees to tell supervisors about the job search was meant to make DaVita more competitive, not stifle competition, by prompting DaVita to offer raises or promotions to keep to those employees.
“It may have been the wrong way to do it; it may have been a messy way of doing it,” Dodd said. “But the question is what is its purpose. That was the purpose of this.”
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