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Illinois SC Rules Against Staffing Agencies in Wage-Fixing Case

By  |  January 24, 2024

The Illinois Supreme Court ruled last week that staffing agencies, a rapidly growing industry employing nearly a million Illinoisans, are not exempt from the state’s antitrust laws. The unanimous 20-page opinion, published on Friday, comes three and a half years after Illinois Attorney General Kwame Raoul initiated legal action against three staffing agencies.

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    The lawsuit accused Elite Staffing Inc., Midway Staffing Inc., and Metro Staffing Inc. of orchestrating no-poach agreements through their mutual client, Colony Display LLC, a construction company based in Elgin, Illinois. These agreements allegedly led to a secondary arrangement that resulted in temporary staff being paid below the market rate.

    Justice P. Scott Neville, writing on behalf of the court, cited a 1979 U.S. Supreme Court opinion, stating that some agreements are “so plainly anticompetitive that they are conclusively presumed illegal without further examination.” The Illinois Supreme Court found that the alleged agreement in this case fell within this category.

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    Colony Display, which specializes in designing and building display models and custom furniture for commercial properties, relies heavily on a temporary workforce. According to court records, the company employs between 75 to 100 full-time employees and up to 1,000 temporary workers at any given time.

    Read more: Illinois Supreme Court Strikes Down Broad Interpretation of Antitrust Law Protecting Workers’ Wages

    The staffing agencies, under contracts with Colony, had significant control over the hiring, firing, and assignment of workers. The lawsuit alleged that starting in 2018, the agencies began coordinating with each other via Colony, creating a no-poach policy that disadvantaged temporary workers.

    The court records revealed instances where Midway employees sought to switch to Elite Staffing due to dissatisfaction with Midway’s employment conditions. Allegedly, Midway Staffing sought Colony’s assistance in preventing the transfer of employees, leading to the enforcement of a no-poaching policy.

    In response to the antitrust lawsuit, Colony Display reached a settlement just before oral arguments in November. As part of the settlement, Colony agreed to pay $1.2 million to compensate the temporary workers impacted by the no-poach agreements.

    This ruling serves as a significant precedent, highlighting the application of antitrust laws to staffing agencies and emphasizing the importance of fair competition and protection of workers’ rights in the state of Illinois.

    Source: Biz Journals