Posted by: John Gilliland
April 19, 2007
Topic: Miscellaneous

There are several lawsuits underway around the country in which nurses are suing hospitals under the antitrust laws for sharing nonpublic information with each other concerning nurses wage rates. The nurses allege the hospitals entered into a wage fixing conspiracy that has had the effect of suppressing wages in the hospitals' market area.

Employers, who are competitors, take some risk when they share wage and benefit information or what they charge for services. While it may be done innocently, such sharing can easily implicate the antitrust laws because of how easily it can result in price fixing or otherwise restrain competition.

Whenever competitors get together, they must be careful in sharing information. It does not matter if it's for lunch, golf, or a trade association meeting. The result can be the same - information is shared that results in less competition.

Think of it this way, if you know what your competitors are paying caregivers, it will affect what you pay your caregivers. If you know what a competitor charges for services, it will affect what you charge.

The risk is when you and your competitors act together. It does not have to be a formal agreement. A wink and a nod or unstated "understanding" can be enough to prove a conspiracy.

The risk of antitrust violations is so great that trade associations are increasingly including warnings when they sponsor meetings at which competitors gather. Typically, the warning is something like this:

"Because of federal and state anti-trust laws, certain topics are not proper subjects for discussion at any XYZ functions. In many cases, our members are competitors and any action or agreement which may eliminate, restrict or govern competition among members or their colleagues could be a violation of anti-trust laws. Those violating the anti-trust laws are subject to severe criminal and civil penalties.

There are ways to lawfully conduct salary or price surveys, but they must be carefully structured to avoid antitrust implications. The U.S. Department of Justice and the Federal Trade Commission both recognize that sharing of information, when done properly, can benefit consumers. Those agencies have established guidelines to follow to avoid antitrust sanctions. The guidelines are at:

http://www.ftc.gov/reports/hlth3s.pdf

Often, small employers think the antitrust laws only apply to big corporations. That is not the case. Whenever competitors share information, the antitrust laws maybe implicated.

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