The Biden administration is throwing its weight behind UPMC workers in an ongoing lawsuit alleging the hospital system has used its market dominance to suppress health care worker wages and job mobility.
The antitrust division of the U.S. Department of Justice filed a statement of interest in the case on Monday in response to UPMC’s recent motion to dismiss the matter. The department urged the courts to reject the company’s motion.
“Plaintiffs identify a long-running sequence of acts that UPMC allegedly used to maintain and extend its … power, including engaging in a series of anticompetitive mergers and acquisitions and imposing employment restraints to inhibit worker mobility,” the Justice Department argued.
The lawsuit, first filed in January by a nurse in Erie, alleges that the $26 billion hospital system’s mergers and acquisitions have created a monopoly of the health care labor market.
“Through a series of strategic acquisitions, UPMC became the dominant leader in the hospital healthcare services and skilled healthcare worker employment … significantly reducing competition in both in-patient hospital services and hospital employment,” the complaint reads.
The lawsuit alleges that UPMC’s acquisition of 28 competitors between 1996 and 2018 also resulted in reduced health care services after the nonprofit closed four hospitals and downsized three others. The suit further claims that the hospital system’s control of the market has led to suppressed wages, unfair working conditions and chronic understaffing.
The plaintiffs claim UPMC uses noncompete clauses and blacklists employees who leave, barring them from employment at another UPMC facility.
“Had UPMC been subject to competitive market forces, it would have had to raise wages to attract more workers and provide higher staffing levels in order to avoid degrading the care it provided to its patients, and in order to prevent losing patients to competitors who could provide better quality care,” the complaint reads.
The complaint sought class-action status to represent registered nurses, licensed practical nurses, medical assistants and orderlies.
UPMC is the largest private employer in Pennsylvania with more than 40 hospitals and control of more than 76% of all hospital employees in Pittsburgh and 67% of all hospital employees in Allegheny County.
While the antitrust case alleges UPMC has monopoly power over hospital services, it also accuses the company of operating as a monopsony in which it exerts unfair leverage over employees.
A spokesperson for UPMC said Wednesday that the plaintiff’s allegations “are factually incorrect and legally unfounded.” In the company’s July motion to dismiss the case, its lawyers argued that the acquisitions were “widely publicized and scrutinized by government agencies.”
Their motion claimed the plaintiffs brought their claims too late under antitrust law and called the allegations a “lengthy and stale list of run-of-the-mill employment grievances,” rather than antitrust violations.
Spokesperson Paul Wood said Wednesday that UPMC is “among the best places to work in all the regions we serve throughout Pennsylvania, New York and Maryland due to above-industry-average wages and employee benefits, which are designed to support the 100,000 people employed throughout the UPMC health system and their families.”
But in its Monday filing, the Justice Department said UPMC is misinterpreting the law.
The department also warned of potential far-reaching consequences on other labor markets if the courts were to side with UPMC and “upend longstanding legal precedent.” The DOJ argued against giving employers “a blank check to wield unlawfully acquired market power, which could result in reduced wages and worse working conditions in concentrated markets.”
Monopolizing power in labor markets could dissolve rivalry among employers to hire and retain workers, the DOJ continued, arguing such rivalry is “foundational to a properly functioning, market-based economy.”
The filing said that competitive labor markets are especially important when it comes to health care workers.
“These workers not only make up a significant share of overall employment, but they also provide critical services that affect the health and wellbeing of the American people,” the filing reads. “When competition for their labor suffers—resulting in lower pay and even worse working conditions—the health of the nation suffers, too.”
