Denver-based DaVita Inc. and the dialysis giant’s former CEO Kent Thiry have been indicted by a federal grand jury on charges that they conspired with competing employers not to try to hire certain workers.
DaVita and Thiry are specifically accused of two counts of violating the Sherman Act, which deals with antitrust law, and are due in court July 20 for their initial appearance.
“Those who conspire to deprive workers of free-market opportunities and mobility are committing serious crimes that we will prosecute to the full extent of the law,” Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division said in a written statement Thursday. “We are grateful for our partnership with the FBI and our shared commitment to rooting out illegal collusion targeting labor markets.”
If convicted, DaVita faces a maximum penalty of a $100 million fine per count. Thiry faces a maximum penalty of 10 years in prison and a $1 million fine per count, according to federal prosecutors.
Thiry, through a spokeswoman, strongly denied the accusations and alleged that federal prosecutors had manufactured a legal theory through which to pursue charges in the case.
“These allegations are false and rely on a radical legal theory about senior executive recruitment without precedent in U.S. history,” said Karen Crummy, a spokeswoman for Thiry. “The government took steps to ignore – and even hide – key evidence. The facts bear it out decisively: No antitrust violations occurred, these companies hired DaVita executives for years, and the companies are not competitors.”
Thiry’s team said the situation was more akin to a human resources dispute than a violation of federal antitrust law.
“Kent Thiry has worked for decades to provide affordable, life-saving health care to millions of Americans,” Crummy said. “He has dedicated the last 10 years to making Colorado a better place for everyone, and he has done it the right way: ethically, lawfully and with integrity.”
Federal prosecutors allege that DaVita and Thiry participated in two separate conspiracies to suppress competition around the hiring of certain employees. The first count alleges DaVita and Thiry conspired with Surgical Care Affiliates LLC — also known as SCA — to agree not to solicit each other’s senior-level employees from as early as February 2012 to as recently as July 2017.
The second count alleges DaVita and Thiry conspired with another, unnamed health care company from April 2017 through June 2019 to not solicit DaVita’s employees.
The 10-page indictment includes emails between Thiry and people at the other companies.
“Someone called me to suggest they reach out to your senior biz dev guy for our corresponding spot,” Thiry emailed the CEO of SCA in October 2014, according to the indictment. “I explained I do not do proactive recruiting into your ranks.”
The CEO of the unnamed health care company wrote to Thiry: “I’m going to make sure everyone on my team knows to steer clear of anyone at DVA.” DVA is DaVita’s stock symbol.
Prosecutors claim Thiry and DaVita’s actions “substantially affected
interstate trade and commerce.”
SCA was indicted in January on similar charges.
Thiry announced he was stepping down as DaVita’s CEO in April 2019, but would continue serving as executive chairman of the company’s board. He stepped down from that executive chairman role in 2020.
Thiry has become a political force in Colorado in recent years, giving at least $5.9 million to support ballot measures, including Amendments Y and Z in 2018, which reshaped the state’s legislative and congressional redistricting processes. The unaffiliated voter also spent heavily last year to ensure passage last year of a ballot question overturning the Gallagher Amendment, a complicated law that drove down property taxes but in the process starved local governments of funding.
The multimillionaire has also been rumored to be interested in running for public office.
Thiry and DaVita have been embroiled in controversy before. The company was sued over kickback allegations, paying the federal government and several states about $400 million in 2014 to settle the case.
The Justice Department says federal prosecutors and the FBI are continuing to investigate the case.