Suit accuses Duke, UNC of antitrust violation

While UNC-Chapel Hill and Duke University might be in fierce competition, medical school administrators have declared a truce — but one faculty member has called foul.

Dr. Danielle Seaman, assistant professor at Duke School of Medicine, filed a class-action lawsuit this summer against Duke, Duke University Health System and Dr. William Roper, dean of UNC School of Medicine, for violating antitrust laws.

UNC, UNC School of Medicine and UNC Health are included in the complaint as “unnamed co-conspirators,” meaning they are not yet named as defendants in the case. But because of the legal placeholder, additional defendants could be added as the case progresses.

The policy in question in the alleged violation is a no-hire agreement between the deans of Duke and UNC’s medical schools meant to prevent faculty poaching. According to her complaint, Seaman was denied a teaching position at UNC School of Medicine, despite her qualifications.

The suit accuses the medical schools of suppressing healthy competition — curbing wages and damaging the professional outlook of skilled individuals.

“All workers have the right to be paid according to a competitive marketplace for their talent, and that includes faculty members and other skilled medical professionals,” said Dean Harvey, an attorney with Lieff, Cabraser, Heimann & Bernstein LLP, the firm handling Seaman’s case.

The lawsuit — originally filed June 9 and amended Aug. 12 to include Roper — is in the first stage of litigation. If the court decides Seaman’s claim has sufficient factual basis, she could subpoena relevant information from the universities.

Representatives for UNC, Duke and the two medical schools declined to comment.

In an email earlier this year, Seaman contacted the chief of cardiothoracic imaging at UNC School of Medicine to ask about a job opening, following two years of communication about job opportunities, during which time she was assured she would “fit in nicely with (the) cardiothoracic imaging group at Carolina.”

“I agree that you would be a great fit for our cardiothoracic imaging division,” the chief told Seaman in an email, which is included in the complaint. “Unfortunately, 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,” it said.

Jeff Hirsch, a professor at UNC School of Law, said such an agreement would be a violation of antitrust law.

“Without a doubt, there is a valid claim being made. The trickier issue in this case is whether or not the plaintiff can prove in fact that there was this agreement,” he said.

The agreement need not be a formal policy for Seaman to have a valid case; it could take the form of an oral or ‘gentlemen’s agreement.’

“Whether the agreement is official or unofficial is irrelevant under antitrust law. What matters is whether there was a meeting of minds,” Harvey said.

Harvey recently helped litigate a high-profile class-action lawsuit in Silicon Valley involving a similar no-poaching agreement between major technology firms Apple, Intel, Google and Adobe. The law firm represented a class of 64,600 people harmed by the agreement, which suppressed employee and wage competition.

The class prevailed, and on July 9, the court held a final hearing to approve a $415 million settlement.

Daniel Crane of the University of Michigan School of Law said plaintiffs can seek two remedies in antitrust cases: damages or an injunction that terminates the offending misconduct. In such cases, plaintiffs typically choose to do both.

“It can be hard to prove what their damages are, but if they can establish reasonably what their lost economic opportunities were if there was to be increased economic competition between the two university hospitals, then there might be damages awarded,” Crane said.

While UNC’s status as a state actor complicates liability in the legal proceedings, Crane said public university standing should not prevent it from being named in the case.

“As a general matter, a public university can be named in an antitrust lawsuit. That’s not really an issue,” he said. “State universities are sued all the time for all kinds of things.”

While the anti-poaching agreement in Seaman’s complaint is limited to incriminating the medical schools, some speculators have suggested it extends further. But UNC has seen several faculty members leave to join Duke’s staff — most recently Jeremy Petranka, former economics professor; Omid Safi, former religious studies professor; and Valerie Ashby, former head of UNC’s Department of Chemistry.

“The fact that you can find professors who have switched is going to undermine that case a little bit,” said Petranka, now an associate professor in the Fuqua School of Business. “But if it does exist and you find someone who has made the switch, I can’t fathom them saying, ‘Oh, yeah, no, we had to work around that,’” he said.

“I’m in a nice position where I don’t know, but for some who did, I can’t imagine they’d come right out and say that given the legal implications.”

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