DENVER (AP) — A jury on Friday acquitted Denver-based dialysis giant DaVita Inc. and former chairman and CEO Kent Thiry of charges that they conspired with three competing firms not to hire certain employees from each other, in violation of federal labor law.
The Denver federal court trial was a first-of-its kind prosecution 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-Trust Act, an 1890 law intent to curb activity that restricts marketplace competition.
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 conspiracy counts last year. The indictment alleged that DaVita and Thiry agreed with Surgical Care Associates, Hazel Health and Radiology Partners not to recruit each other’s senior executives and other employees between 2012 and 2019.
DaVita and Thiry, supported by local and national business groups, argued the non-solicitation agreements violated no laws and that the government was applying an exaggerated, if novel, interpretation of the Sherman Anti-Trust 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. It denies any wrongdoing.
DaVita had faced a maximum penalty of $100 million per count if convicted, while Thiry had faced up to a $1 million fine per count and up to 10 years in prison.
Anthony Mariano, an anti-trust attorney with the Justice Department, told jurors in closing arguments Wednesday that Thiry and DaVita cheated employees of job opportunities and that Thiry used the threat of retaliation to block executives from leaving his firm.
“This isn’t the story of a CEO wanting what’s best for his employees,” Mariano argued, according to the Post. “It’s a story of a CEO who wanted control.”
Employees generally didn’t know about the agreements, Mariano said, inadvertently losing opportunities to advance their careers.
“Because Kent Thiry didn’t tell them about it, they never know when they’re cheated out of 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 he was told he had to tell his DaVita supervisor first that he was job-hunting.
Thiry did not testify during the trial. His attorney, Juanita Brooks, called the Justice Department case a “witch hunt.”
The defense’s only witness, Pierre Cremieux, an economist with expertise in anti-trust issues, testified that an analysis he performed of executives’ compensation and turnover data showed no evidence of any agreement stifling opportunities for employees.
DaVita attorney John Dodds argued that asking employees to inform supervisors about job searches was meant to make DaVita more competitive, not stifle competition, by prompting DaVita to offer raises or promotions to keep those employees.
“It may have been the wrong way to do it; it may have been a messy way to do it,” Dodd said. “But the question is the purpose of it. That was the purpose of it.”