Dec 16, 2021 | Antitrust, Blog
Pratt & Whitney; QuEST Global Services-NA, Inc.; Belcan Engineering Group, LLC; Belcan Engineering Group Limited Partnership; Cyient Inc.; Parametric Solutions, Inc.; Agilis Engineering, Inc., Et Al Subject Of “No-Poach” Antitrust Suit Alleging Claims Under The Sherman Act
On December 14, 2021, a class action lawsuit was filed in United States District Court, District of Connecticut, against Pratt & Whitney, a Division of Raytheon Technologies Corporation; QuEST Global Services-NA, Inc.; Belcan Engineering Group, LLC; Belcan Engineering Group Limited Partnership; Cyient Inc.; Parametric Solutions, Inc.; Agilis Engineering, Inc.; Mahesh Patel; Robert Harvey; Harpreet Wasan; Thomas Edwards; Gary Prus; Frank O’Neill; and others, as of yet unknown, for claims under the Sherman Act to recover damages and other relief for the substantial injuries Plaintiff and others similarly situated have sustained arising from the Defendants’ anticompetitive conduct.
The class action, according to the complaint, stems from alleged unlawful agreements among the aerospace engineering firm Defendants to restrain competition in the labor markets in which they compete for employees who, principally, are engineers and other skilled employees in the aerospace industry. The Defendants are major competitors for engineering services, and they compete with each other to attract, hire, and retain skilled employees, including engineers and other skilled employees.
Beginning, however, at least as early as 2011 and continuing through at least 2019, senior executives and managers at Defendants, allegedly, entered into a conspiracy not to solicit, recruit, hire without prior approval, or otherwise compete for employees, including engineers and other skilled employees (the “no-poach agreement”).
The antitrust class action complaint alleges that the Defendants agreed to restrict competition for their employees’ services with the purpose and effect of fixing, suppressing, and stabilizing wages, salaries, and benefits and restraining competition in the market for their employees’ services. Further, the Defendants’ agreement to fix, suppress, and stabilize wages, salaries and benefits also, according to the complaint, restricted their employees’ mobility to access better job opportunities.
To view a copy of the antitrust class action complaint, please click Aerospace Engineering Complaint.
If You Were Employed As An Engineer Or Other Skilled Employee At Any Time From 2011 To September 2019 At Pratt & Whitney, a Division of Raytheon Technologies Corporation; QuEST Global Services-NA, Inc.; Belcan Engineering Group, LLC; Belcan Engineering Group Limited Partnership; Cyient Inc.; Parametric Solutions, Inc.; Agilis Engineering, Inc., Or One Of Their Wholly-Owned Subsidiaries, You Are Encouraged To Contact Kehoe Law Firm, P.C. By Completing The Form On The Right Or Via [email protected], For A Free, No-Obligation Evaluation Of Potential Legal Claims.
Dec 15, 2021 | Antitrust, Blog
Executive Charged For Playing Key Role In Long-Running Antitrust Conspiracy That Illegally Limited Workers’ Career Prospects And Earnings
The U.S. District Court for the District of Connecticut unsealed a criminal complaint accusing a former aerospace outsourcing executive of participating in a long-running conspiracy with managers and executives of several outsource engineering suppliers (“Suppliers”) to restrict the hiring and recruiting of engineers and other skilled laborers among their respective companies.
According to the filed documents, Mahesh Patel (“Patel”), of Glastonbury, Connecticut, a former director of global engineering services at a major aerospace engineering company, enforced this agreement while serving as an intermediary between conspiring Suppliers. Patel appeared remotely before a federal court in Hartford, Connecticut after his arrest on the complaint charging him with conspiracy in restraint of trade. He was released on conditions including travel restrictions and a $100,000 appearance bond. The charge against Patel is the first in this ongoing federal antitrust investigation.
According to the affidavit filed in support of the criminal complaint, Patel upheld a conspiracy among aerospace companies not to hire or recruit one another’s employees. At times, Patel confronted and berated Suppliers who cheated on the agreement, often at the direct behest of another Supplier, and threatened to punish nonconforming Suppliers by taking away valuable access to projects. In addition, as the complaint alleges, Patel and co-conspirators recognized the mutual financial benefit of this agreement — namely, reducing the rise in labor costs that would occur when aerospace workers were free to find new employment in a competitive environment.
The maximum penalty for conspiracy to restrain trade under the Sherman Antitrust Act is 10 years of imprisonment and a fine of $1 million for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.
A criminal complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Source: U.S. Department of Justice, justice.gov.
Jan 8, 2021 | Antitrust
Have You Served As A Senior-Level Employee For Surgical Care Affiliates Or Its Competitors Between 2010 and 2017?
Kehoe Law Firm, P.C. is investigating class action claims on behalf of senior-level employees who worked for Surgical Care Affiliates or its competitors between 2010 and 2017.
On January 7, 2021, the U.S. Department of Justice issued a press release (“Health Care Company Indicted for Labor Market Collusion”), which, among other things, stated that “[a] federal grand jury returned a two-count indictment charging Surgical Care Affiliates LLC and its related entity (collectively SCA), which own and operate outpatient medical care centers across the country, for agreeing with competitors not to solicit senior-level employees, . . .. These are the Antitrust Division’s first charges in this ongoing investigation into employee allocation agreements.”
The indictment, according to the Department of Justice, further “. . . charges SCA with entering into and engaging in two separate bilateral conspiracies with other health care companies to suppress competition between them for the services of senior-level employees, in violation of the Sherman Act. Beginning at least as early as May 2010 and continuing until at least as late as October 2017, SCA conspired with a company based in Texas to allocate senior-level employees by agreeing not to solicit each other’s senior-level employees. Beginning at least as early as February 2012 and continuing until at least as late as July 2017, SCA separately conspired with a company based in Colorado to allocate senior-level employees through a similar non-solicitation agreement.”
If you served as a senior-level employee at Surgical Care Affiliates or one of its competitors between 2010 and 2017 and wish to discuss Kehoe Law Firm’s investigation or potential legal claims, please contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected].
Apr 14, 2020 | Antitrust
Class Action Filed Against Grubhub, DoorDash, Postmates, and Uber Technologies – Companies Allegedly Use Their Meal Delivery Market Monopoly Power To Prevent Competition And Limit Consumer Choice
Kehoe Law Firm, P.C. is making consumers aware that on April 13, 2020, a class action lawsuit was filed against Grubhub, Inc., also doing business as Seamless, DoorDash Inc., Postmates Inc., and Uber Technologies, Inc., in its own right and as parent of wholly-owned subsidiary Uber Eats, in United States District Court, Southern District of New York.
According to the complaint, “Defendants’ anticompetitive conduct has enabled each Defendant to: (a) prevent and limit competition in the Meal Delivery Market; (b) prevent and limit competition in the Direct Purchase Market; [and] (c) prevent and limit competition in the Dine-In Market.” Class members, allegedly, “. . . purchased meals from restaurants that were subject to Defendants’ [No Price Competition Clause]. As a result of Defendants’ illegal conduct, these consumers were compelled to pay artificially inflated prices for their meals.” [Emphasis added.]
The complaint, among other things, alleges the following:
Unable to compete on anything that ‘meaningfully impact[s] user experience,’ each Defendant instead uses its monopoly power in the meal delivery market to prevent competition and limit consumer choice. Specifically, Defendants use their market power to impose unlawful price restraints in their merchant contracts, which have the design and effect of restricting price competition from competitors in order to maintain the Delivery Apps’ market share.
In their form contracts with restaurants, Defendants include clauses requiring uniform prices for restaurants’ menu items throughout all purchase platforms (the “No Price Competition Clause” or “NPCC”). The NPCCs prevent restaurants from charging different prices to meal delivery customers than they charge to dine-in customers for the same menu items. The purpose and effect of the No Price Competition Clause is to act as an unlawful price restraint that prevents restaurants from gaining marketshare and increased profitability per consumer by offering lower prices to consumers. The NPCCs target and harm not only restaurants, but also two distinct classes of consumers: (1) consumers who purchase directly from restaurants in the Meal Delivery Market; and (2) consumers who buy their meals in the separate and distinct restaurant Dine-In Market.[] Both restaurants and consumers would benefit absent Defendants’ unlawful restraints[.]
The rise of the four Defendants has come at great cost to American society. Defendants offer restaurants a devil’s choice: in exchange for permission to participate in Defendants’ Meal Delivery monopolies, restaurants must charge supra-competitive prices to consumers who do not buy their meals through the Delivery Apps,[] ultimately driving those consumers to Defendants’ platforms. Unable to offer consumers the increased choice of paying better prices to dine-in, restaurants have seen precious dine-in customers slip away year after year.
Defendants’ NPCCs work by forcing Direct and Dine-In consumers to shoulder Defendants’ exorbitant economic rents. While both meals sold through Defendants’ platforms and directly from the restaurant share the same costs and overhead, meals sold through the Delivery Apps are more expensive, because of Defendants’ high fees. Restaurants must calibrate their prices to the more costly meals served through the Delivery Apps in order to not lose money on those sales. Defendants’ unlawful NPCCs then force restaurants to also charge those higher prices to Dine-In and Direct Consumers, even though the cost of those consumers’ meals are lower as they do not include Defendants’ exorbitant fees.
Absent Defendants’ unlawful restraints, restaurants could offer consumers lower prices for direct sales, because direct consumers are more profitable. This is particularly true of Dine-In consumers, who purchase drinks and additional items, tip staff, and generate good will. Restaurants cannot offer Plaintiffs and the class this lower cost option, because the Delivery Apps’ No Price Competition Clauses prevent them from doing so. [Emphasis added.]
The Class is defined as all persons or entities who, since April 14, 2016, either 1) purchased meals directly from any restaurant contemporaneously contracted with the Delivery Apps or 2) all persons or entities who purchased Dine-In meals from any restaurant contracted with the Delivery Apps of Defendants Grubhub, Uber and/or Uber Eats, Postmates and/or DoorDash.
Apr 6, 2020 | Antitrust
Class Action Alleges Fair Isaac Corporation’s Anticompetitive Conduct Discouraged Adoption of Credit Score Alternative for Business Purchasers of FICO Credit Scores
Kehoe Law Firm, P.C. is making business owners aware that on April 2, 2020, a class action lawsuit was filed in United States District Court, Northern District of Illinois, against Fair Isaac Corporation on behalf of “B2B Purchasers” of a FICO B2B Credit Score from Fair Isaac and/or a Credit Bureau.
The lawsuit “concerns the B2B Credit Score Market, over which Defendant Fair Isaac has unlawfully maintained a 90% monopoly for many years.” According to the complaint, “Fair Isaac has abused its monopoly power by engaging in anticompetitive and exclusionary conduct and agreements. Fair Isaac has suppressed competition, stymied innovation, and limited access to credit for millions of Americans – all in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§1 & 2, as well as numerous state antitrust and unfair trade practices laws.” [Emphasis added.]
Alleged Pattern of Anticompetitive Conduct To Discourage Adoption of VantageScore Credit Score Alternative
The antitrust class action complaint alleges that
[r]ather than compete on the merits with VantageScore, Fair Isaac has engaged in a pattern of anticompetitive conduct over the course of more than a decade to discourage the adoption of VantageScore and preserve its own monopoly, with the Credit Bureaus’ [i.e., TransUnion, Experian, and Equifax] assistance. Fair Isaac has abused its monopoly power to prevent the Credit Bureaus from successfully marketing and selling a competitive alternative to FICO Scores and has waged a disparaging public relations and advertising campaign to create fear, uncertainty, and doubt about VantageScore’s viability and reliability with lenders and consumers.
Through its exclusionary conduct, Fair Isaac has succeeded in preventing the substantial sales growth that VantageScore or a competing credit scoring system would have achieved though competition on the merits. Having suppressed competition, Fair Isaac has been able to significantly increase prices, including most recently in September 2019, for its FICO Scores. But for Fair Isaac’s suppression of competition and the resulting contractual agreements not to compete, VantageScore or another competitive credit scoring system would have thrived and won substantial market share through its innovative product and would have reduced the prices paid for B2B Credit Scores by Plaintiff and members of the Class.
Fair Isaac’s anticompetitive and exclusionary conduct has harmed businesses that have been deprived of competitive pricing for instruments to allow them to gauge credit risk and have had their freedom of choice restricted. Opening the market to competition is essential to competitive pricing and product innovation, including scoring the tens of millions of creditworthy Americans who have been denied access to credit. [Emphasis added]
If you are a lender, financial institution or other business (i.e., a “B2B Purchaser,”) that purchased a FICO B2B Credit Score from Fair Isaac or a Credit Bureau, you are encouraged to contact Kehoe Law Firm, P.C. to discuss potential legal claims.
Kehoe Law Firm, P.C.
Nov 19, 2018 | Antitrust
FTC Commissioners Find 1-800 Contacts Unlawfully Harmed Competition in Online Search Advertising Auctions, Restricting the Availability of Truthful Advertising to Consumers
On November 14, 2018, the Federal Trade Commission announced that it held that 1-800 Contacts, the nation’s largest online retailer of contact lenses, unlawfully entered into a web of anticompetitive agreements with rival online contact lens sellers.
A Commission Opinion, authored by Chairman Joseph J. Simons, ruled that the agreements between 1-800 Contacts and fourteen online sellers of contact lenses constitute unfair methods of competition, in violation of Section 5 of the FTC Act. The agreements prevent online contact lens retailers from bidding for search engine result ads that would inform consumers that identical products are available at lower prices. The FTC Opinion held that the agreements harm competition in bidding for search engine key words, artificially reducing the prices that 1-800 Contacts pays, as well as the quality of search engine results delivered to consumers. According to the FTC, although the Opinion directly addresses restraints to search engine advertising for contact lenses, it carries broader implications for preserving competition through online advertising.
The FTC’s Order requires 1-800 Contacts to cease and desist from enforcing the unlawful provisions in its existing agreements and from entering into similar agreements in the future. It prohibits 1-800 Contacts from agreeing with other contact lens retailers to restrict search advertising or to limit participation in search advertising auctions.
The FTC’s Opinion stems from an August 2016 administrative complaint. It upholds Chief Administrative Law Judge D. Michael Chappell’s October 2017 Initial Decision, which similarly found that the agreements were unfair methods of competition.
The FTC vote approving the Opinion and Final Order was 3-1-1, with Commissioner Noah Joshua Phillips dissenting and Commissioner Christine S. Wilson not participating.
Commissioner Rebecca Kelly Slaughter issued a concurring statement. Commissioner Phillips issued a dissenting statement.
According to the FTC, 1-800 Contacts may file a petition for review of the FTC Opinion and Final Order with a U.S. Circuit Court of Appeals within 60 days after service of the Final Order.
Source: FTC.gov
