A healthcare staffing company, VDA OC (formerly Advantage On Call), and a former manager were indicted Tuesday on suspicion of colluding to suppress wages of school nurses, the US Department of Justice announced. The alleged conspiracy took place from October 2016 until July 2017. Advantage On Call was among the Advantage RN affiliates acquired that same month, July 2017, by Cross Country Healthcare Inc. (NASDAQ: CCRN), which issued a press release today that some media outlets erroneously stated a subsidiary of Cross Country and an executive were charged in the case.
Cross Country said the charges in the Department of Justice case do not involve it, its subsidiaries or its executives as the alleged events occurred prior to the acquisition.
“Recent media reports inaccurately suggest that Cross Country Healthcare is involved in the charges brought last night against VDA OC and its former employee,” said Susan Ball, executive VP, CAO and general counsel, at Cross Country. “We are immediately requesting a correction with media that have inaccurately included our company in the reporting on this.”
According to the Department of Justice, former Advantage On Call manager Ryan Hee entered into a conspiracy with a competitor to allocate employee nurses and fix the wages of those nurses, in violation of the Sherman Act.
Hee, a resident of Las Vegas, along with a co-conspirator at the competitor agreed to not recruit or hire nurses staffed by their respective companies at Clark County School District facilities in Las Vegas and to not raise wages of those nurses, according to the department. Advantage was one of two primary providers of contract nursing services to the school district. Hee was a regional manager for Advantage On Call in its Las Vegas office.
The one-count felony indictment was filed in the US District Court for the District of Nevada.
“When employers conspire to allocate employees and fix wages, it robs American workers of higher pay and the ability to bargain for better, higher-paying jobs,” said Acting Assistant Attorney General Richard Powers of the Department of Justice’s Antitrust Division. “Ensuring that American workers receive the benefits of free and fair competition is a top priority, so we will use every investigative tool at our disposal to investigate these crimes and prosecute perpetrators to the full extent of the law.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and a maximum penalty of a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum.