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Antitrust Waivers For COVID-19 Issues?

on Monday, 27 April 2020 in Covid-19 Information Hub

As with many other laws affecting health care providers, new antitrust enforcement guidance has been issued with respect to COVID-19 issues.

The first guidance was announced jointly by the Federal Trade Commission (“FTC”) and Department of Justice on March 24, 2020. The guidance noted that the spread of COVID-19 will require unprecedented cooperation between federal, state, and local governments and among private businesses to protect Americans’ health and safety. The thrust of this guidance was that such cooperation in several areas has already been recognized as permissible under the antitrust laws. Examples given included:

  • Collaboration on research and development;
  • Sharing general “know-how” and clinical best practices and other similar information to combat COVID-19, such as clinical outcome data and suggested practice parameters to develop protocols or otherwise increase quality and efficiency;
  • Joint purchasing arrangements among hospitals or other health care providers designed to achieve efficiencies (e., cost-savings) that should benefit consumers, citing existing safe harbors for such activities; and
  • Emergency measures and government collaboration to support the government’s COVID-19 efforts (for example, coordinating behavior to help health care providers receive critical supplies).

The FTC also announced a process for expedited staff advisory opinions for antitrust guidance with respect to requests related to COVID-19. 

So, in light of the difficulty of keeping critical staff and the financial hurdles hospitals face, does that mean that the hospitals in a region can get together and agree that they will not hire workers coming from a competitor hospital and that will not increase wages more than 5% during the pandemic? 

The answer is a clear “No”. 

The Agencies followed up their March 24, 2020 statement with a joint statement on April 13, 2020 affirming the importance of competition for American workers and that they will protect competition for workers on the frontlines of the COVID-19 response by enforcing the antitrust laws against those who seek to exploit the pandemic to engage in anticompetitive conduct in labor markets. Specifically, they informed the public that they are on alert for employers, staffing companies, and recruiters who might engage in collusion or other anticompetitive conduct that harms workers. Examples given included agreements to suppress or eliminate competition with respect to compensation, benefits, hours worked, and other terms of employment, as well as the hiring, soliciting, recruiting, or retention of workers. The Agencies concluded that companies and individuals who enter into naked wage-fixing and no-poach agreements may be criminally prosecuted, and those that invite collusion may be subject to civil enforcement, even absent a collusive agreement. 

The bottom line is that while the antitrust laws may have some greater flexibility with respect to COVID-19 issues, there is no blanket waiver and thus health care providers should continue to adhere to existing antitrust compliance policies. 

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