A proposed class action lawsuit brought by healthcare workers accusing UPMC of wielding its market power to suppress the labor market has picked up support from the U.S. Department of Justice (DOJ).
Monday, the federal government filed a statement of interest urging a federal judge not to toss the case, as was requested by the large nonprofit health system in an earlier motion to dismiss.
Doing so would “potentially enable real anticompetitive harm to healthcare workers,” the DOJ wrote in its filing.
The initial complaint filed back in January outlined UPMC’s “overarching anticompetitive scheme … to acquire and exploit” monopoly power over hospital services and monopsony power (when an entity is the sole buyer) over hospital workers.
Echoing claims in a prior union- and legislator-backed report, it alleged that the health system had acquired several hospitals to expand its market power. This allowed UPMC to allegedly use noncompete clauses and do-not-hire blacklists to reduce mobility, limit wages to “sub-competitive levels” and suppress workers’ ability to organize, according to the complaint.
The DOJ wrote in its filing that the allegations are worthy of the court’s attention.
“The United States’ interest in protecting competition in labor markets is especially strong when it comes to healthcare workers,” the DOJ wrote in the filing. “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. … When competition for their labor suffers—resulting in lower pay and even worse working conditions—the health of the nation suffers, too.”
UPMC is Pennsylvania’s largest private employer with about 100,000 workers on its payrolls. The 42-hospital system reported $27.7 billion in revenue but a $198 million operating loss in 2023, and halfway through 2024 still has operations $313 million in the red. Some of that loss comes from a restructuring tied to a wave of layoffs.
Paul Wood, UPMC's vice president and chief communications officer, said in a statement 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.
"As we have made clear in our motion to dismiss, the plaintiffs’ allegations are factually incorrect and legally unfounded," he said.
UPMC previously wrote in a filing supporting its bid to dismiss that the plaintiffs did not convincingly define an antitrust market or allege monopsony power in line with antitrust law.
It also argued that the alleged mobility restrictions, if true, would not exclude other employers from hiring those workers and that the plaintiff shouldn’t be allowed “to seek nearly 30 years of damages under the Sherman Act based on claimed lower wages allegedly stemming from mergers consummated decades earlier, well outside the four-year statute of limitations.”
The DOJ wrote in this week’s filing that the legal justification UPMC employed in its bid to dismiss were misstated and misapplied. The argument in UPMC’s motion, the DOJ wrote, “raises the bar to nearly insurmountable heights for complaints alleging exclusionary conduct that harms workers, demanding a level of granularity that plaintiffs will rarely be able to satisfy pre-discovery.”
The American Economic Liberties Project, an anti-monopoly group that had backed a 2023 report alleging many of the same anticompetitive practices, applauded the federal government for stepping in.
“For far too long, UPMC has deployed its market power to harm workers across Western Pennsylvania: lowering wages, degrading working conditions, and illegally preventing workers from unionizing or switching jobs,” the group said in a Tuesday statement. “The DOJ’s statement underscores the agency’s by-the-book commitment to applying antitrust law in labor markets. We look forward to seeing the results that this class action suit and intensifying DOJ scrutiny will yield for Pennsylvania’s healthcare workers.”