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DaVita Recovers After Company, Ex-CEO Charged With Labor Violations

DaVita and its former CEO allegedly conspired to 'suppress competition for the services of certain employees.'

DaVita  (DVA) - Get DaVita Inc. Report was up slightly Friday after the operator of kidney dialysis centers and its former CEO, Kent Thiry, were indicted by a federal grand jury with conspiring with competitors not to hire each other's key employees, officials said.

Both DaVita and Thiry have denied the charges.

Shares of the Denver company were up slightly Friday to $120.13.

The U.S. Department of Justice said that DaVita's co-conspirator, Surgical Care Affiliates LLC and its related entity, collectively known as SCA, were charged in January. That case is pending in the Northern District of Texas.

The indictment alleges that DaVita and Thiry both participated in two separate conspiracies to suppress competition for the services of certain employees.

The first count charges DaVita and Thiry for conspiring with SCA to allocate senior-level employees by agreeing not to solicit each other’s senior-level employees from February 2012 to July 2017.

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The second count charges DaVita and Thiry for conspiring with another healthcare company from April 2017 until June 2019 to allocate employees by agreeing that the other health care company would not solicit DaVita’s employees.

“You also have my commitment we discussed that I'm going to make sure everyone on my team knows to steer clear of anyone at DVA and that I'll come back to you and talk before ever get anywhere near a point that could contemplate someone else," an unnamed person to Thiry in an email, according to the indictment.

"These charges show a disturbing pattern of behavior among health care company executives to conspire to limit the opportunities of workers,” Assistant Director in Charge Steven  D’Antuono of the FBI’s Washington Field Office, said in statement.

DaVita said in a statement that "the charges against the company are unjust and unwarranted" and promised to "vigorously defend the company against this unjustified action." 

Karen Crummy, spokesperson for Thiry, said the allegations against the former CEO were "false and rely on a radical legal theory about senior executive recruitment without precedent in U.S. history," Reuters reported.

Last year, Hindenberg Research issued a report charging that DaVita appeared to be the main funding entity behind a powerful lobbying group in California.