FTC approves toothless settlement with DFW staffing agencies over wage fixing allegations
In March 2017, Neeraj Jindal had a problem. He ran a Richland Hills staffing agency that provided home health care agencies with therapists to do house calls. One of those agencies had just informed him that it was reducing the amount it would be paying for each house call. Jindal knew if he passed this pay cut down to the therapists, they would find another staffing agency to work with, threatening his business. So Jindal did what squeezed contractors often do: He decided to screw his workers. Jindal directed one of his physical therapists to send a text message to Sheri Yarbray, the owner of a competing staffing agency. The message disclosed the new, lower rate that Jindal planned to pay his therapists. Yarbray responded: “Yes I agree[.] I’ll do it with u.” Jindal then contacted four other DFW therapist staffing agencies requesting that they lower their rates the same amount. Laura Padin, a senior staff attorney at the National Employment Law Project, called this a “blatant example” of wage fixing, which particularly threatens gig workers — independent contractors, like many of these therapists — who are vulnerable to collusion by the large firms that typically employ them. The Federal Trade Commission investigated, and confirmed that Jindal and Yarbray had indeed broken the law. But, in a move that seemed to rile nearly everyone, from legal scholars and unions to one of the agency's own commissioners, the agency declined to levy any punishment. Sanjukta Paul, a law professor at Wayne State University,.said that monetary penalties are necessary in a case like this to change the “decision calculus for these middlemen businesses” and make wage fixing less attractive. Generally, such schemes are difficult to identify, making this a rare opportunity to penalize perpetrators. But she’s encouraged by the public statements being made by the FTC’s Democratic commissioners, which she said could mark a change in the agency’s antitrust enforcement strategy. “There's kind of been this bipartisan consensus that overall antitrust law doesn’t do much,” she said. “I think that antitrust law can be leveraged to make this a slightly less terrible place for American workers,” Paul added.
November 12, 2019