The unprecedented criminal conspiracy case against DaVita Inc. and its former CEO is now in the hands of a federal jury, which will decide whether the Denver-based dialysis giant and its leader stymied competition and limited employees’ ability to land new jobs and advance their careers.
The trial, now in its second week, has drawn widespread attention as the first time a CEO and company have been criminally charged for non-poaching agreements under the Sherman Anti-Trust Act, an 1890 law that prescribes free competition in commerce.
Experts said the verdict, in either direction, could reverberate throughout the country.
The prosecution, in its closing arguments Wednesday afternoon, cited “overwhelming evidence” that ex-CEO Kent Thiry and DaVita used these agreements with rival companies to “cheat employees out of job opportunities.” The executive would also use his influence and personal relationships to retaliate and block employees trying to leave DaVita, the government’s attorney, Anthony Mariano, told the jury.
“This isn’t the story of a CEO wanting what’s best for his employees,” Mariano argued. “It’s a story of a CEO who wanted control.”
What made these agreements so nefarious, the prosecution alleged, was that employees often never even knew about them in the first place. They didn’t get solicitation calls from recruiters or an email or LinkedIn message, the government said. As a result, Mariano argued, these people lost the chance to earn a higher salary or take their careers in their own hands.
“Because Kent Thiry didn’t tell them about it, they never know when they’re cheated out of a job opportunity,” the prosecutor told the jury.
The government brought nine witnesses in the week-and-a-half trial, including former DaVita executives, an FBI agent and a former mid-level employee, according to BusinessDen. Elliot Holder, the former employee, testified that he turned down another job after being told that he first had to tell his boss at DaVita that he was job searching — part of the so-called “tell your boss” rule that Thiry allegedly implemented to restrict movement to competitors.
The defense brought one witness, an economist, who testified that a data analysis of compensation and turnover rates did not show economic evidence that competition had been stifled through any agreements, BusinessDen reported.
DaVita’s defense attorney acknowledged in his closing arguments Wednesday that Thiry behaved badly when he heard of his employees leaving for other companies.
“It’s not about any of that,” John Dodds argued. “It’s not about whether any of this looks or feels good, cause it doesn’t. It looks and feels bad.”
But the case isn’t about whether or not Thiry is a bad guy, Dodds said. There’s no evidence, he said, that DaVita made these agreements in order to end meaningful competition. In fact, the attorney argued, this was about competition and giving DaVita the ability to compete.
“It may have been the wrong way to do it; it may have been a messy way to do it,” Dodd said. “But the question is the purpose of it. That was the purpose of it.”
Thiry’s own attorney, Juanita Brooks, told jurors the federal investigation of the former DaVita chief was a “witch hunt.”
A federal grand jury last year indicted DaVita and Thiry on three conspiracy counts. The indictment alleged the dialysis giant and three other companies — Surgical Care Associates, Hazel Health and Radiology Partners — agreed not to recruit each other’s workers at various times between 2012 and 2019, violating antitrust laws. All three companies were led by former DaVita executives.
Surgical Care Affiliates is facing its own criminal case as a co-conspirator.
If convicted, DaVita faces a maximum penalty of $100 million per count, while Thiry could be sentenced to pay up to a $1 million fine per count and serve up to 10 years in prison.
Thiry led DaVita for two decades before stepping down as CEO in 2019.
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