A Texas company that provides therapist staffing services to home health agencies, its owner, and the former owner of a competing staffing company have agreed to settle FTC charges that they agreed to reduce pay rates for therapists and invited other competitors to collude on the rates.
Your Therapy Source and other therapist staffing companies contract with or employ therapists, including physical, occupational, and speech therapists and therapist assistants, to treat patients of home health agencies. The complaint names Your Therapy Source, its owner Sheri Yarbray, and Neeraj Jindal, the previous owner of a competing therapist staffing company.
“Just as it is illegal for competitors to agree to fix prices on the products they sell in order to drive prices up, it is illegal for competitors to agree to fix wages or fees paid to workers in order to drive wages down,” said Bruce Hoffman, Director of the Bureau of Competition. “All workers are entitled to competitive wages and the FTC will enforce the antitrust laws against any companies that agree not to compete for workers, or to attempt to drive down workers’ wages. Fortunately, in cooperation with the Texas Attorney General’s office, we were successful in stopping this conduct quite quickly. We will aggressively investigate any other instances in which companies engage in this type of behavior, and we will seek relief commensurate with the conduct, the harm to workers, and—where appropriate—any ill-gotten benefits received by the firms engaged in the illegal activities.”
According to the complaint, the two owners agreed to lower their therapist pay rates to the same level and also invited several of their competitors to lower their rates in an attempt to keep therapists from switching to staffing companies that paid more. The complaint alleges that they entered into the agreement after learning that a home health agency planned to pay significantly lower rates to the therapist staffing companies for therapist services.
The complaint charges Your Therapy Source and the two owners with violating Section 5 of the Federal Trade Commission Act by unreasonably restraining competition to offer competitive pay rates to therapists; fixing or decreasing pay rates for therapists; and depriving therapists of the benefits of competition among therapist staffing companies.
The proposed consent order prohibits the parties from colluding with competitors on compensation paid to their employees or independent contractors. Under the order, the parties are barred from entering into or organizing agreements with any person to lower, fix, maintain, or stabilize the compensation that they or the other person pays, or is willing to pay, in competing with each other for therapists or other types of employees and independent contractors. They are also barred from inviting competitors to enter such agreements and from exchanging information with competitors related to compensation of employees and independent contractors.
In October 2016, the FTC and the Department of Justice issued Guidance for Human Resource Professionals for tips on how to avoid antitrust risks associated with agreements among competing employers to fix wages. That guidance, which is available on the FTC website, outlines steps businesses can take to comply with the antitrust laws in recruiting and retaining employees.
Further details about the consent agreement are set forth in the analysis to aid public comment for this matter.
FTC staff worked closely with the staff of the Texas Office of the Attorney General, which issued a similar complaint and settlement order.
The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through Aug. 30, 2018, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $41,484.
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