Duke Radiologist Files Class Action Suit Alleging Duke University Health System Conspiracy with UNC Health System Not to Poach Each Other’s Medical Faculty

bird-IIIThis blog is about more than just employee departures that involve allegations of trade secret theft – it is also about litigation involving employee departures and related issues.  On June 9th, the well-respected national law firm Lieff Cabraser filed a complaint in the United States District Court for the Middle District of North Carolina on behalf of a Duke Health System radiologist alleging that Duke University Health System’s “senior administrators and deans entered into express agreements to eliminate or reduce competition among them for skilled medical labor.”  The complaint further alleges that Duke conspired with other hospital systems, including the UNC Health Care System, to enter into the agreement that the parties to the agreement would not hire or attempt to hire certain medical facility faculty and staff employed at the other and vice-versa.

Some readers of this blog wouldn’t know that Duke and UNC are less than 20 miles apart from each other, which would presumably amplify the effects of such an agreement.  The complaint alleges, of course, that the effect of such an agreement is to suppress employee compensation and mobility.  The complaint alleges violations of the federal Sherman Act and also North Carolina state law prohibiting the illegal restraint of trade.

Calling the express agreement the “no-hire agreement” the complaint alleges that the only exception to the “no-hire agreement” made (allegedly) between the Dean of the Duke School of Medicine and Dean of the UNC School of Medicine would be “for faculty who are granted a promotion simultaneous to their hiring.”  In other words, the complaint suggests that if one or the other medical faculties were to grant the candidate a promotion from, say, “Assistant Professor” to “Associate Professor” then the agreement would not apply.  But the complaint went on to say, since there is no higher title than “Professor” that the agreement would not permit Duke to hire UNC’s full professors and vice-versa.

The complaint indicates that Dr. Danielle Seaman, the radiologist and lead plaintiff of the proposed class, learned of the agreement when seeking employment with UNC while actively employed at Duke.  Dr. Seaman specifically alleges that in February of 2015, after a few years of back and forth regarding openings on UNC’s cardiothoracic imaging faculty, she was told in an e-mail from UNC’s Chief of Cardiothoracic Imaging that “I just received confirmation today from the Dean’s office that lateral moves of faculty between Duke and UNC are not permitted.  There is reasoning for this “guideline” which was agreed upon between the deans of UNC and Duke a few years back.  I hope you understand.”  Frustrated, Dr. Seaman allegedly responded that UNC was one of two major hospital systems in the service area and she was already working at Duke and the UNC Chief of Cardiothoracic Imaging allegedly responded “the “guideline” was generated in response to an attempted recruitment by Duke a couple of years ago of the entire UNC bone marrow transplant team; UNC had to generate a large retention package to keep the team intact.”

This is certainly going to be a litigation to watch.  Stay tuned . . .

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Author Todd Sullivan

Todd has a niche practice focusing on employee departures and defections, including the litigation of injunctions and trials in cases involving noncompete and nonsolicitation covenants, trade secret misappropriation, allegations of unfair competition, duty of loyalty breaches, inevitable disclosure, and employee raiding. His clients are companies and key employees who seek his advice regarding the retention and separation process; he routinely drafts, reviews, and negotiates employment retention and separation agreements. As lead counsel, Todd has litigated more than 100 employee defection matters in federal and state trial and appellate courts and has arbitrated others throughout the United States. His clients span every industry sector — banking, insurance, biotechnology, manufacturing, life sciences, computer services, computer software, personnel placement, securities brokerage, advertising, radio and television broadcasting, legal medical and architectural professional services, government contracting, and even NASCAR. Todd recently served as lead defense counsel in one of the most significant broker defection cases ever tried before FINRA and also as lead plaintiff’s counsel in the largest-ever case of trade secrets theft in North Carolina.

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