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District Court Finds Antitrust Division’s First Wage Fixing Indictment Alleges a Per Se Violation

 |  January 3, 2022

By: Robert Connolly (Cartel Capers)

On November 29, 2021 in U.S. v.  Neeraj Jindal and John Rodgers, Civil Action No. 4:20-CR-00358A (N.D. Texas), District Court Judge Amos L. Mazzant rejected defendants’ motion to dismiss the indictment on various grounds, including challenges to the per se rule. Among  other arguments, defendants argued that “wage-fixing” was not covered by the Sherman Act because it did not involve the purchase and sale of goods. Defendants also argued that courts did not have enough experience with wage-fixing (this was the government’s first wage-fixing indictment) to label the conduct a per se violation.

The indictment charges Neeraj Jindal, the former owner of a physical therapist staffing company, and John Rodgers an ex-director of the company, with a per se Sherman Act violation by agreeing to fix the wages paid to physical therapists and therapist assistants in the Dallas-Fort Worth area.

Judge Mazzant wrote a thoroughly researched and well-reasoned opinion finding that the per se rule applied to an agreement to fix wages. The opinion dealt with number of issues raised but in this blog post I discuss two important aspects of the Court’s ruling.  The full opinion is well worth reading (here).USvJINDAL20211129.

The Per Se Rule Applies to Buyers as Well as Sellers

Judge Mazzant recognized that the facts of the case were unusual.  This was the first ever criminal wage fixing case brought by the Antitrust Division. Price-fixing cases nearly always involve the sale of good with the restraint resulting in increased prices for consumers.  A successful wage-fixing conspiracy could arguably reduce the price paid by consumers–if the savings in suppressed wages was passed on. Nonetheless, the Court found that “[J]ust because the typical price-fixing conspiracy involves certain hallmarks does not mean that other less prevalent forms of price-fixing agreements are not likewise unlawful.”  The Court noted that price-fixing agreements among buyers have been condemned as per seviolations citing Mandeville Island Farms, Inc. v. Am. Crystal Sugar Co., 334 U.S. 219, 235 (1948)(“It is clear that the agreement is the sort of combination condemned by the Act, even though the price-fixing was by purchasers, and the persons specially injured . . . are sellers, not customers or consumers.”) and Nat’l Macaroni Mfrs. Ass’n v. Fed. Trade Comm’n., 345 F.2d 421, 426–27 (7th Cir. 1995)(finding a price-fixing agreement among manufacturers to standardize the composition of their product in an effort to depress the price of an essential raw material to be illegal per se)…