Notice2021-24554
In the Matter of DaVita, Inc. and Total Renal Care, Inc.; Analysis of Agreement Containing Consent Orders To Aid Public Comment
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 10, 2021
Issuing agencies
Federal Trade Commission
Abstract
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis of Proposed Consent Orders to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders--embodied in the consent agreement--that would settle these allegations.
Full Text
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<title>Federal Register, Volume 86 Issue 215 (Wednesday, November 10, 2021)</title>
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[Federal Register Volume 86, Number 215 (Wednesday, November 10, 2021)]
[Notices]
[Pages 62533-62537]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24554]
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FEDERAL TRADE COMMISSION
[File No. 211 0013]
In the Matter of DaVita, Inc. and Total Renal Care, Inc.;
Analysis of Agreement Containing Consent Orders To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis of Proposed Consent Orders to Aid Public Comment
describes both the allegations in the complaint and the terms of the
consent orders--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before December 10, 2021.
[[Page 62534]]
ADDRESSES: Interested parties may file comments online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write: ``In the Matter
of DaVita, Inc. and Total Renal Care, Inc.; File No. 211 0013'' on your
comment, and file your comment online at <a href="http://www.regulations.gov">www.regulations.gov</a> by
following the instructions on the web-based form. If you prefer to file
your comment on paper, please mail your comment to the following
address: Federal Trade Commission, Office of the Secretary, 600
Pennsylvania Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580;
or deliver your comment to the following address: Federal Trade
Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Stuart Hirschfeld (206-220-4484) and
Danica Noble (206-220-5006), Northwest Regional Office, Federal Trade
Commission, 915 2nd Avenue, Seattle, WA 98104.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis of Agreement Containing Consent Orders to Aid Public
Comment describes the terms of the consent agreement and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC website at
this web address: <a href="https://www.ftc.gov/news-events/commission-actions">https://www.ftc.gov/news-events/commission-actions</a>.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before December 10,
2021. Write ``In the Matter of DaVita, Inc. and Total Renal Care, Inc.;
File No. 211 0013'' on your comment. Your comment--including your name
and your state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the <a href="http://www.regulations.gov">www.regulations.gov</a>
website.
Due to protective actions in response to the COVID-19 pandemic and
the agency's heightened security screening, postal mail addressed to
the Commission will be subject to delay. We strongly encourage you to
submit your comments online through the <a href="http://www.regulations.gov">www.regulations.gov</a> website.
If you prefer to file your comment on paper, write ``In the Matter
of DaVita, Inc. and Total Renal Care, Inc.; File No. 211 0013'' on your
comment and on the envelope, and mail your comment to the following
address: Federal Trade Commission, Office of the Secretary, 600
Pennsylvania Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580;
or deliver your comment to the following address: Federal Trade
Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If
possible, submit your paper comment to the Commission by courier or
overnight service.
Because your comment will be placed on the publicly accessible
website at <a href="http://www.regulations.gov">www.regulations.gov</a>, you are solely responsible for making
sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include any
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including in particular competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on <a href="http://www.regulations.gov">www.regulations.gov</a>--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from that website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at <a href="https://www.ftc.gov">https://www.ftc.gov</a> to read this Notice
and the news release describing this matter. The FTC Act and other laws
the Commission administers permit the collection of public comments to
consider and use in this proceeding, as appropriate. The Commission
will consider all timely and responsive public comments it receives on
or before December 10, 2021. For information on the Commission's
privacy policy, including routine uses permitted by the Privacy Act,
see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Analysis of Agreement Containing Consent Orders To Aid Public Comment
I. Introduction
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an Agreement Containing Consent Order (``Consent
Agreement'') with DaVita, Inc., through its wholly-owned subsidiary,
Total Renal Care, Inc. (``DaVita''). The proposed Consent Agreement is
intended to remedy the anticompetitive effects that would likely result
from DaVita's proposed acquisition (``Proposed Acquisition'') of all
dialysis clinics owed by the University of Utah (``University'').
Pursuant to an Asset Purchase Agreement dated September 22, 2021,
DaVita proposes to acquire all 18 dialysis clinics from the University
in a non-HSR-reportable transaction. DaVita is the largest provider of
dialysis services in the United States and the University is an
academic and public research institution in the State of Utah. The 18
dialysis clinics extend from the southeast corner of Nevada to the
southern part of Idaho. The Commission alleges in its Complaint that
the Proposed Acquisition if consummated, would violate Section 7 of the
Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the FTC Act, as
amended, 15 U.S.C. 45, by reducing competition and increasing
concentration in outpatient dialysis services provided in the Provo,
Utah market.
The proposed Consent Agreement will remedy the alleged violations
by preserving competition that would otherwise be eliminated by the
Proposed Acquisition. Under the terms of the Consent Agreement, DaVita
is
[[Page 62535]]
required to divest three dialysis clinics to Sanderling Renal Services,
Inc., (``SRS'') and must provide SRS with transition services for one
year. In addition, DaVita cannot: (1) Enter into, or enforce, any non-
compete agreements with physicians employed by the University that
would restrict their ability to work at a clinic operated by a
competitor of DaVita (except to prevent a medical director under a
contract with DaVita from simultaneously serving as a medical director
at a clinic operated by a competitor); (2) enter into any agreement
that restricts SRS from soliciting DaVita's employees for hire; or (3)
directly solicit patients who receive services from the divested
clinics for two years. Finally, DaVita is required to receive prior
approval from the Commission before acquiring any new ownership
interest in a dialysis clinic in Utah.
II. The Relevant Market and Competitive Effects
The Commission's Complaint alleges the relevant line of commerce is
the provision of outpatient dialysis services. Patients receiving
dialysis services have end stage renal disease (``ESRD''), a chronic
disease characterized by a near total loss of function of the kidneys
and fatal if not treated. Many ESRD patients have no alternative to
outpatient dialysis treatment because they are not viable home dialysis
or transplant candidates (or they are waiting for a transplant for
multiple years, during which time they must still receive dialysis
treatment). Treatments are usually performed three times per week for
sessions lasting between three and four hours. According to the United
States Renal Data System, there were over 555,000 ESRD dialysis
patients in the United States in 2018.
The Commission's Complaint also alleges the relevant geographic
market in which to assess the competitive effects of the Proposed
Acquisition is the greater Provo, Utah area. Specifically, the market
is centered on Provo, Utah and extends north to Orem, Utah and south to
Payson, Utah. The market is defined by the distance ESRD patients will
travel to receive reoccurring treatments. Because ESRD patients are
often suffering from multiple health problems and may require
assistance traveling to and from the dialysis clinic, patients cannot
travel long distances to receive treatment. Accordingly, most patients
are unwilling or unable to travel more than 30 minutes or 30 miles for
treatment, although travel times and distances may vary by location.
Dialysis providers seek to attract patients by competing on quality
of services. To some extent, the providers also compete on price.
Although Medicare eventually will cover all ESRD patients' dialysis
costs, there is a 30-month transition period where commercially insured
patients' costs are covered by their insurers, which compensate the
providers at competitively negotiated rates.
In the greater Provo market, there are only three providers: The
University (which has three clinics), DaVita (four clinics) and
Fresenius Medical Care (one clinic). Therefore, the University and
DaVita directly and substantially compete in the relevant market as the
two largest providers, and DaVita would own seven of the eight clinics
in the region. The Proposed Acquisition would eliminate competition
between DaVita and The University in the relevant market for outpatient
dialysis services, increasing the ability to unilaterally raise prices
to third-party payers and decreasing the incentive to improve the
quality of services provided to patients.
III. Entry
Entry into the outpatient dialysis services market in the greater
Provo, Utah area would not be likely, timely, or sufficient in
magnitude, character, and scope to deter or counteract the
anticompetitive effects of the Proposed Acquisition. The most
significant barrier to entry is contracting a nephrologist with an
established referral base to serve as the clinic's medical director.
The Department of Health and Human Services requires each dialysis
clinic have a nephrologist as a medical director. Locating a
nephrologist is difficult because clinics typically enter into
exclusive contractual arrangements with a nephrologist who is paid a
medical director fee. Finding patients may also be difficult if the
nephrologist does not have local ties, as most nephrologists typically
refer their patients to the clinic where they serve as medical
director. Moreover, the area itself must have a low penetration of
dialysis clinics and a high ratio of commercial to Medicare patients to
attract entry.
IV. The Agreement Containing Consent Order
Section II of the Proposed Order requires that DaVita divest the
three University clinics in the greater Provo market to SRS, including
all of the assets necessary for SRS to independently and successfully
operate the clinics, which include, among other things, all leases for
real property, all medical director contracts, and a license for each
clinics' policies and procedures.
Section IV of the Proposed Order requires that DaVita provide
transition services to SRS for up to one year, and Section V requires
DaVita to provide assistance to SRS in hiring the employees at the
divested clinics and to refrain from soliciting those employees for 180
days. In addition, Section V prohibits DaVita from entering into or
enforcing non-compete agreements with any University nephrologist,
except to prevent a medical director under a contract with DaVita from
simultaneously serving as a medical director at a clinic operated by a
competitor. Section V also prohibits DaVita from entering into any non-
solicitation agreement with SRS that would prevent SRS from soliciting
DaVita's employees for hire.
Section VI of the Proposed Order, along with the Order to Maintain
Assets, requires that DaVita take such actions as are necessary to
maintain the full economic viability, marketability, and
competitiveness of the divested clinics and their assets. Section VIII
provides for the appointment of a Monitor to oversee the divestiture.
Section X of the Proposed Order requires DaVita to obtain prior
approval from the Commission for any future acquisition of any
ownership interests in any dialysis clinic in Utah. With regard to
transactions involving clinics in multiple states, such prior approval
only applies to the clinics in Utah.
The Commission does not intend this analysis to constitute an
official interpretation of the proposed Order or to modify its terms in
any way.
By direction of the Commission.
April J. Tabor,
Secretary.
Concurring Statement of Commissioner Christine S. Wilson
Today, the Commission announces a consent order to settle
allegations that the proposed acquisition of the dialysis business of
the University of Utah Health (``University'') by Total Renal Care,
Inc., a wholly-owned subsidiary of DaVita Inc. (``DaVita''), may
substantially lessen competition in the market for outpatient dialysis
services in the greater Provo, Utah area. I support the outcome but
believe two aspects of the consent order warrant discussion so that my
support is not misconstrued. Those two sets of provisions relate to
prior approval and non-compete agreements. I then highlight a third
provision--a ban on no-poach agreements--in light of the ongoing
dialogue regarding whether antitrust
[[Page 62536]]
enforcement adequately protects competition for labor inputs.
Prior Approval and Non-Compete Agreement Provisions
First, DaVita is required to receive prior approval from the
Commission before acquiring any new ownership interest in a dialysis
clinic in Utah. The Commission rescinded the 1995 Policy Statement
Concerning Prior Approval and Prior Notice (``1995 Policy'') on July
21, 2021. I dissented from this rescission for three reasons: The 1995
Policy was put in place to prevent resource-intensive and vindictive
litigation; it preserved the use of prior approval provisions in
appropriate circumstances; and the majority did not provide new
guidance explaining how these provisions would be used following
rescission of the 1995 Policy.\1\
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\1\ Oral Remarks of Commissioner Christine S. Wilson, Open
Commission Meeting on July 21, 2021 at 8-11 (July 21, 2021), <a href="https://www.ftc.gov/system/files/documents/public_statements/1592366/commissioner_christine_s_wilson_oral_remarks_at_open_comm_mtg_final.pdf">https://www.ftc.gov/system/files/documents/public_statements/1592366/commissioner_christine_s_wilson_oral_remarks_at_open_comm_mtg_final.pdf</a>. See also Dissenting Statement of Commissioner Noah Joshua
Phillips Regarding the Commission's Withdrawal of the 1995 Policy
Statement Concerning Prior Approval and Prior Notice Provisions in
Merger Cases (July 21, 2021), <a href="https://www.ftc.gov/system/files/documents/public_statements/1592398/dissenting_statement_of_commissioner_phillips_regarding_the_commissions_withdrawal_of_the_1995.pdf">https://www.ftc.gov/system/files/documents/public_statements/1592398/dissenting_statement_of_commissioner_phillips_regarding_the_commissions_withdrawal_of_the_1995.pdf</a>.
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Because I believe the 1995 Policy provided sound guidance on the
appropriate use of prior approval provisions, I will assess the
propriety of the prior approval provision in this matter against that
touchstone. The 1995 Policy noted prior approval is most likely
appropriate where there is a credible risk a company engaged in an
anticompetitive merger would attempt the same or approximately the same
merger in the future.\2\ DaVita has engaged in a pattern of acquiring
independent dialysis facilities; \3\ many of these acquisitions fall
below HSR thresholds and consequently escape premerger review,\4\
including this proposed acquisition. There is some evidence this
pattern of sub-HSR acquisitions has led to higher prices and lower
service levels in the dialysis field.\5\ For this reason, I have
encouraged the Commission on previous occasions to study this
industry.\6\
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\2\ Notice and Request for Comment Regarding Statement of Policy
Concerning Prior Approval and Prior Notice Provisions in Merger
Cases, 60 FR 39745, 39746 (August 3, 1995), <a href="https://www.ftc.gov/system/files/documents/public_statements/410471/frnpriorapproval.pdf">https://www.ftc.gov/system/files/documents/public_statements/410471/frnpriorapproval.pdf</a>.
\3\ Paul J. Eliason et al., How Acquisitions Affect Firm
Behavior and Performance: Evidence from the Dialysis Industry, 135
Quarterly J. Econ. 221, 235 (2020) (showing how the acquisitions of
independent facilities have contributed to DaVita's overall growth).
\4\ Thomas Wollmann, How to Get Away With Merger: Stealth
Consolidation and its Real Effects on US Healthcare (Nat'l Bureau of
Econ. Rsch., Working Paper No. 27274) (``In short, the FTC blocks
nearly all reportable facility acquisitions resulting duopoly and
monopoly. In sharp contrast, the dashed line reflects exempt
facility acquisitions. These ownership changes witness effectively
no enforcement actions, regardless of simulated HHI change. This
includes dozens of facility acquisitions involving [Delta]HHI
>2,000, several of which involve [Delta]HHI near 5,000.'').
\5\ Eliason et al., supra note 3, at 223 (``We find that
acquired facilities alter their treatments in ways that increase
reimbursements and decrease costs. For instance, facilities capture
higher payments from Medicare by increasing the amount of drugs they
administer to patients, for which Medicare paid providers a fixed
per-unit rate during our study period. . . . On the cost side, large
chains replace high-skill nurses with lower-skill technicians at the
facilities they acquire, reducing labor expenses. Facilities also
increase the patient load of each employee by 11.7% and increase the
number of patients treated at each dialysis station by 4.5%,
stretching resources and potentially reducing the quality of care
received by patients.'').
\6\ See, e.g., Statement of Commissioner Christine S. Wilson,
Joined by Commissioner Rohit Chopra, Concerning Non-Reportable Hart-
Scott-Rodino Act Filing 6(b) Orders (February 11, 2020), https://
www.ftc.gov/system/files/documents/public_statements/1566385/
statement_by_commissioners_wilson_and_chopra_re_hsr_6b.pdf#:~:text=St
atement%20of%20Commissioner%20Christine%20S.%20Wilson%2C%20Joined%20b
y,that%20drive%20content%20curation%20and%20targeted%20advertising%20
practices.
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Against this backdrop, a prior approval provision is appropriate
here. Specifically, there is a credible risk DaVita will attempt to
acquire additional dialysis facilities in the same general area in
which divestiture has been ordered. But to be clear, my vote in favor
of this consent should not be construed as support for the liberal use
of prior approval provisions foreshadowed by the Commission's majority
when it rescinded the 1995 Policy.
Second, the order contains provisions that prohibit DaVita from
enforcing non-compete agreements in the University of Utah
nephrologists' medical director contracts.\7\ Some commentators have
suggested non-compete provisions should be banned, and some of my
current and former colleagues on the Commission have expressed sympathy
for that view.\8\
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\7\ Analysis of Agreement Containing Consent Orders to Aid
Public Comment, In the Matter of DaVita, Inc. and Total Renal Care,
Inc., No. 211-0013 (October 25, 2021), (``[The Order] prohibits
DaVita from entering into or enforcing non-compete agreements with
any University nephrologist. . . .'').
\8\ Letter from Chair Lina M. Khan to Chair Cicilline and
Ranking Member Buck at 2 (Sept. 28, 2021), <a href="https://docs.house.gov/meetings/JU/JU05/20210928/114057/HHRG-117-JU05-20210928-SD005.pdf">https://docs.house.gov/meetings/JU/JU05/20210928/114057/HHRG-117-JU05-20210928-SD005.pdf</a>
(``The FTC has heard concerns about noncompete clauses at its open
meetings, and the Commission recently opened a docket to solicit
public comment on the prevalence and effects of contracts that may
harm fair competition. As we pursue this work, I am committed to
considering the Commission's full range of tools, including
enforcement and rulemaking.''); New Decade, New Resolve to Protect
and Promote Competitive Markets for Workers, Remarks of Commissioner
Rebecca Kelly Slaughter As Prepared for Delivery at FTC Workshop on
Non-Compete Clauses in the Workplace at 1 (Jan. 9, 2020), <a href="https://www.ftc.gov/system/files/documents/public_statements/1561475/slaughter_-_noncompete_clauses_workshop_remarks_1-920.pdf">https://www.ftc.gov/system/files/documents/public_statements/1561475/slaughter_-_noncompete_clauses_workshop_remarks_1-920.pdf</a> (``I also
want to thank the advocates and academics--including those
participating today--who have raised awareness about and contributed
both research and new ideas to the discussion concerning non-compete
provisions in employment contracts. State attorneys general and
their staff have also been at the forefront of this issue by
investigating and initiating legal action to end unjustified and
anticompetitive non-compete clauses in employment contracts.'');
Letter from Commissioner Rohit Chopra to Assistant Attorney General
Makan Delrahim at 3 (Sept. 18, 2019), <a href="https://www.ftc.gov/system/files/documents/public_statements/1544564/chopra_-_letter_to_doj_on_labor_market_competition.pdf">https://www.ftc.gov/system/files/documents/public_statements/1544564/chopra_-_letter_to_doj_on_labor_market_competition.pdf</a> (``A rulemaking
proceeding that defines when a non-compete clause is unlawful is far
superior than case-by-case adjudication.''); Open Markets Institute
et al., Petition for Rulemaking to Prohibit Worker Non-Compete
Clauses, (posted by the Fed. Trade Comm'n on July 21, 2021), <a href="https://www.regulations.gov/document/FTC-2021-0036-0001">https://www.regulations.gov/document/FTC-2021-0036-0001</a>.
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While I disagree with that perspective,\9\ I have concluded the
provisions limiting the effect of non-competes in this matter are
necessary to achieve an effective remedy. Specifically, the operations
of a dialysis facility must occur under the auspices of a nephrologist;
indeed, without a nephrologist, a dialysis clinic cannot operate.
Nephrologists are in short supply,\10\ and the inability of a facility
owner to retain or replace a licensed nephrologist could serve as a
barrier to entry or, in this case, preclude the buyer from continuing
to compete in the market. Moreover, a repeal of non-competes to
effectuate a remedy is not novel; past consent orders have included
provisions that prohibit merging parties from enforcing non-competes to
aid divestiture buyers in hiring employees.\11\ For these reasons, I
[[Page 62537]]
support the provisions pertaining to non-competes in this matter--but
my acquiescence to these provisions should not be construed as support
for a sweeping condemnation of non-competes more generally.
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\9\ Testimony of Commissioner Christine S. Wilson at the Hearing
on Reviving Competition, Part 4: 21st Century Antitrust Reforms and
the American Worker at 9-12, (Sept. 28, 2021), <a href="https://www.ftc.gov/system/files/documents/public_statements/1596880/commissioner_wilson_hearing_on_reviving_competition_part_4_-_21st_century_antitrust_reforms_and_the.pdf">https://www.ftc.gov/system/files/documents/public_statements/1596880/commissioner_wilson_hearing_on_reviving_competition_part_4_-_21st_century_antitrust_reforms_and_the.pdf</a>.
\10\ Muhammad U. Sharif et al., The global nephrology workforce:
Emerging threats and potential solutions!, 9 Clinical Kidney J. 11,
13 (2016), <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4720191/">https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4720191/</a>
(``These facts would suggest that the current nephrology workforce
[in the U.S.] should increase in order to compensate for the
expected growth in patient numbers. Unfortunately, the opposite
appears to be the case.'').
\11\ See, e.g., Decision and Order, Gallo et al. No. 191-0110 at
VI.A.4 (April 5, 2021), <a href="https://www.ftc.gov/system/files/documents/cases/gallo-cbi_decision_and_order_final_201107.pdf">https://www.ftc.gov/system/files/documents/cases/gallo-cbi_decision_and_order_final_201107.pdf</a> (``Remove any
impediments within the control of Respondents that may deter
relevant Divestiture Business Employees from accepting employment
with the Acquirer, including removal of any non-compete . . .'');
Decision and Order, Stryker et al., No. 201-0014 at VI.B.3 (Dec. 17,
2020), <a href="https://www.ftc.gov/system/files/documents/cases/2010014c4728strykerwrightorder.pdf">https://www.ftc.gov/system/files/documents/cases/2010014c4728strykerwrightorder.pdf</a> (``Remove any impediments within
the control of Respondents that may deter Implant Business Employees
from accepting employment with the Acquirer, including removal of
any non-compete . . .''); Decision and Order, Arko Holdings et al.,
No. 201-0041 at VI.B.3 (Oct. 7, 2020), <a href="https://www.ftc.gov/system/files/documents/cases/c-4726_201_0041_arko_empire_order.pdf">https://www.ftc.gov/system/files/documents/cases/c-4726_201_0041_arko_empire_order.pdf</a>
(``Remove any impediments within the control of Respondents that may
deter Retail Fuel Employees from accepting employment with an
Acquirer . . .''). This consent does contain a new twist on our
approach to non-competes. Specifically, DaVita may not enforce non-
competes to the extent they prevent competitors or potential
competitors from obtaining the services of a nephrologist, which
will allow potential competitors to launch a competing dialysis
clinic in Utah. Given my understanding of DaVita's business
practices, the nephrologist shortage, and the historical industry
context, I believe this remedy constitutes appropriate fencing-in
relief.
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Ban on No-Poach Agreements
The order contains an anti-no-poach provision that prevents DaVita
from entering into any agreement that would restrict the divestiture
buyer from soliciting DaVita's employees. I highlight this provision
because some critics have asserted antitrust enforcement ignores
competition for labor as an input.\12\ I believe modern antitrust
enforcement does, in fact, police the market for unlawful practices
impacting competition for labor.\13\ Naked no-poach agreements are per
se illegal under the antitrust laws, and have been subject to
enforcement accordingly.\14\
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\12\ Testimony of Eric A. Posner on Antitrust and Labor Markets
at 2 (Sept. 28, 2021), <a href="https://docs.house.gov/meetings/JU/JU05/20210928/114057/HHRG-117-JU05-Wstate-PosnerE-20210928.pdf">https://docs.house.gov/meetings/JU/JU05/20210928/114057/HHRG-117-JU05-Wstate-PosnerE-20210928.pdf</a> (``Yet,
while thousands of antitrust cases have been brought over the years,
hardly any have addressed labor market cartelization. The Justice
Department and the Federal Trade Commission have reviewed thousands
of mergers, approving some and rejecting others, but have not even
once analyzed the labor market effects of a merger.'').
\13\ Testimony of Commissioner Christine S. Wilson at the
Hearing on Reviving Competition, Part 4: 21st Century Antitrust
Reforms and the American Worker at 12-14, (Sept. 28, 2021), <a href="https://www.ftc.gov/system/files/documents/public_statements/1596880/commissioner_wilson_hearing_on_reviving_competition_part_4_-_21st_century_antitrust_reforms_and_the.pdf">https://www.ftc.gov/system/files/documents/public_statements/1596880/commissioner_wilson_hearing_on_reviving_competition_part_4_-_21st_century_antitrust_reforms_and_the.pdf</a>.
\14\ Dep't of Justice, Antitrust Div. & Fed. Trade Comm'n,
Antitrust Guidance for Human Resource Professionals (Oct. 2016),
<a href="https://www.justice.gov/atr/file/903511/download">https://www.justice.gov/atr/file/903511/download</a>.
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With respect to the instant matter, DaVita and its former CEO were
recently indicted for agreeing with competitors to refrain from
recruiting one another's employees.\15\ In a past consent order, where
respondents had entered into no-poach agreements, provisions explicitly
prohibiting these agreements have been included in an order.\16\ I
support the inclusion of an anti-no-poach provision in this order
because of the relevant allegations against DaVita and to allow the
Commission to pursue an order violation if DaVita attempts to limit
competition through anticompetitive no-poach agreements in the future.
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\15\ Indictment, United States v. DaVita Inc. et al., No. 1:21-
cr-00229 (D. Colo. July 14, 2021).
\16\ Press Release, Fed. Trade Comm'n, VieVu's Former Parent
Company Safariland Agrees to Settle Charges That It Entered into
Anticompetitive Agreements with Body-Worn Camera Systems Seller Axon
(April 17, 2020), <a href="https://www.ftc.gov/news-events/press-releases/2020/04/vievus-former-parent-company-safariland-agrees-settle-charges-it">https://www.ftc.gov/news-events/press-releases/2020/04/vievus-former-parent-company-safariland-agrees-settle-charges-it</a> (``According to the complaint, the agreements barred
Safariland from competing with Axon now and in the future on all of
Axon's products, limited solicitation of customers and employees by
either company, and stifled potential innovation or expansion by
Safariland. . . . Under the proposed order, Safariland is required
to obtain approval from the Commission before entering into any
agreement with Axon that restricts competition between the two
companies.'').
[FR Doc. 2021-24554 Filed 11-9-21; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on November 10, 2021.
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