Aya Healthcare Services, Inc. v. AMN Healthcare, Inc., __ F.4th __, No. 20–55679, 2021 WL 3671384 (9th Cir. Aug. 19, 2021)
Aya Healthcare Services and AMN Healthcare are both healthcare staffing agencies that place travel nurses on temporary assignments at hospitals and other healthcare facilities. When AMN could no longer fulfill its hospital customers’ demand for travel nurse assignments, it entered into associate vendor (AV) contracts with other providers, including Aya. The contract prohibited Aya from soliciting AMN employees. A few years later, Aya began soliciting AMN’s travel nurse recruiters, after which the two parties terminated their AV contract. Aya then sued AMN alleging various state and federal claims, including an antitrust claim under the Sherman Act. Aya claimed exclusionary and retaliatory damages resulting from the non-solicitation provision and from AMN’s termination of the AV relationship, respectively. The district court granted summary judgment to AMN, ruling that Aya had not demonstrated a retaliatory cartel action, provided evidence of AMN’s market power, or shown that AMN’s actions had an anti-competitive effect. Aya appealed, arguing that the non-solicitation provision was a naked no-poaching restraint that should be analyzed under the per se standard, and that it violated the Sherman Act under the quick-look and rule-of-reason standards. Aya also claimed entitlement to retaliatory damages because AMN had “cartelized” the labor market.
The Ninth Circuit affirmed. It explained that naked restraints are limited to agreements that have no purpose other than stifling competition, which was not the case here. The non-solicitation provision was exempt from the per se rule under the ancillary restraints doctrine because it was subordinate and collateral to the legitimate AV contract and the provision was reasonably necessary to achieve the parties’ pro-competitive purposes of meeting hospital staffing needs. The Ninth Circuit rejected Aya’s claim that the unlimited duration of the non-solicitation provision made it a naked restraint because it was entered into at the same time as the AV agreement. It also rejected Aya’s claim that AMN had to prove there were no less restrictive means of ensuring competition, because that is merely one factor considered under the rule of reason test. The Court held that the district court properly applied the rule-of-reason standard and properly upheld the provision under that standard because Aya failed to meet its threshold burden of proving the provision’s substantial anticompetitive effect. The Court also affirmed the district court’s determination that the evidence Aya provided (a study from an expert economist) was flawed and lacked concrete economic analysis, and thus did not prove the non-solicitation provision’s anticompetitive effects or AMN’s market power. Finally, the Court also denied Aya’s retaliatory damages claim on the grounds that Aya did not provide sufficient evidence of a cartel or concerted action by AMN.
