A federal lawsuit filed against the “no-poach” agreements between Duke University and the University of North Carolina (UNC) is being closed by a judge after finalizing a deal that settles the claims, The Associated Press reported.
The agreement prohibited schools from hiring medical faculty of each other. As a part of the deal, the Duke University will pay $54.5 million, which will be divided among current and former employees with amounts depending on their work duration and salaries.
Under the agreement, Duke is prohibited from entering, maintaining, or enforcing unlawful no-poach agreements for five years.
The lawsuit was filed by Duke radiologist Danielle Seaman in 2015 covering 5,500 faculty members at Duke and UNC that alleged the schools of violating Section 1 of the Sherman Act by “eliminating competition for faculty, restricting their mobility, and suppressing their compensation.”
Seaman lawyers are expected to get more than $3 million as a part of the settlement deal.
Earlier this year, the Department of Justice filed a Statement of Interest in the suit to properly address the standard for judging the legality of alleged no-poach agreements under the Sherman Act, and to ensure the application of antitrust laws. It later filed a motion to intervene in a private antitrust class action.
“Dr. Seaman’s class action challenged alleged anticompetitive conduct occurring at the intersection of two important sectors of the U.S. economy: healthcare and higher education,” Makan Delrahim, assistant attorney general of the Justice Department’s Antitrust Division had said.
Duke has continued to maintain that it didn’t indulge in any misconduct and settled the suit only to save time and costs involved in extending the litigation.
In a similar lawsuit, the University of Southern California (USC) agreed to settle an Alzheimer’s disease research lawsuit with the University of California, San Diego for $50 million. The suit alleged USC of recruiting UC San Diego’s Alzheimer’s disease expert and director of the program, Paul Aisen, along with eight of his colleagues by offering them lucrative positions.