Court of Appeals favors AMN in employee solicitation case

The US Court of Appeals for the Ninth Circuit ruled in favor of AMN Healthcare Services Inc. in a lawsuit brought by Aya Healthcare Inc. over contract language that prevented subcontracting staffing firms from soliciting AMN employees.

Aya had provided travel nurses to healthcare facilities as a subcontractor for AMN starting in 2010, but the business relationship soured over solicitation of AMN’s travel nurse recruiters, according to the opinion.

In its opinion, the Court of Appeals wrote that Aya did not prove that “AMN’s non-solicitation agreement has a substantial anticompetitive effect that harms consumers in the relevant market.”

The court also rejected a claim for retaliatory damages because it said no evidence was presented of a “cartel or concerted action” when the subcontracting deal between AMN and Aya was terminated in 2015.

“We are not surprised by the 9th Circuit’s ruling in favor of AMN,” said Susan Salka, president and CEO of AMN Healthcare.

“We take great pride in our business practices that empower and expedite healthcare delivery, especially during this unprecedented time when healthcare organizations and their patients need us more than ever,” Salka said. “We are grateful to our clients, partners, and team members that they did not allow this meritless lawsuit to distract them from our shared mission to serve our communities.”

Issued last Thursday, the opinion upholds a decision by the district court in the case.

In a response to the opinion, Aya sent this statement to SIA:

“AMN’s conduct and use of employee restraints have been deemed unlawful under California Law. The Ninth Circuit’s opinion does not modify that ruling nor injunction which remain in place today. Right now, our primary focus is on delivering the clinicians America’s hospitals critically need.

“To put this ruling in context, this saga initially began over six years ago when AMN originally sued Aya and our employees in an attempt to prevent AMN recruiters from joining Aya, limiting their mobility in the travel-nurse industry. AMN’s strong-arm tactics did not work and Aya vigorously defended itself and its employees. The California state court in that action held that AMN’s suit against Aya and the employees was “objectively baseless” and litigated “in bad faith” to disrupt a competitor’s operations. The court also took note of a prior lawsuit that AMN had litigated against a different competitor, alleging the same legal wrongs against it, which had likewise been dismissed as a matter of law. The court’s decision in AMN v. Aya was upheld by the California Court of Appeal and resulted in a permanent injunction forcing AMN to cease its use of unlawful contractual restraints with its employees and modify their business practices. Aya is focused on customer and employee satisfaction, not restraints, and believes a fair and open labor market benefits everyone – patients, hospitals and clinicians.

“Aya Healthcare filed the federal anti-trust case because it believes and alleged that AMN’s practices, in particular, with its broad use of non-solicitation covenants, also violated federal and state antitrust law. This anti-trust lawsuit sought to curtail AMN’s use of such restraints and the accompanying anti-competitive effects to Aya and the industry. We are reviewing the recent ruling as we consider seeking further review.”