New York Attorney General Letitia James recently reached a $400,000 settlement with Affordable Senior Care of New York LLC (Affordable) for engaging in anticompetitive conduct in the homecare industry. New York-based Affordable acts as a “fiscal intermediary” registered with New York’s Medicaid program’s Consumer Directed Personal Assistance Program. Fiscal intermediaries like Affordable handle “timesheet processing, payments to a patient’s caregivers, and other administrative jobs on behalf of patients.” Patients can choose the caregiver of their choice, including a family member or a friend, and naturally, tend to pick the fiscal intermediary that pays a higher hourly wage.
To compete with one another in the market to “recruit and retain patients and their selected caregivers,” fiscal intermediaries must not enter into unlawful, no-poach agreements. AG James’s investigation found that an Affordable executive entered into an unlawful no-poach agreement with its competitor Marks Homecare Agency — an entity with which AG James already reached a similar $500,000 settlement. The agreement prevented both companies from taking each other’s existing patients, and they also shared information about the hourly rates they paid caregivers to reduce competition. This prevented patients from switching to a provider that could pay their caregivers more, and it violated New York General Business Law Section 343 (Donnelly Act) and New York Executive Law Section 63(12).
In addition to the financial penalty, Affordable and its executive cannot enter into any anticompetitive agreements that restrict patient options. Affordable also must “administer an antitrust compliance program with training for its management and executive personnel.” Finally, Affordable must provide annual reports to the AG’s office regarding its compliance for the next five years.
Why It Matters
Not limited to the New York AG’s office, no-poach agreements and clauses already fall under intense scrutiny from federal and state regulators. In fact, Washington AG Ferguson released a report in 2020 on his two-year investigation, eliminating no-poach practices nationally at 237 corporate franchise chains with three or more locations in Washington. Also, the Federal Trade Commission recently pushed to ban noncompete clauses, highlighting the significance of no-poach agreements and the importance of complying with laws and regulations. As such, companies must take these issues seriously to avoid regulatory scrutiny and potential penalties.
Troutman Pepper State Attorneys General Team
|Ashley Taylor – Co-leader and Firm Vice Chair |
Ashley is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. He focuses primarily on federal and state government regulatory and enforcement matters involving state attorneys general, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC). Drawing upon his experience as a deputy attorney general, Ashley has developed an extensive consumer practice with regard to the consumer financial services industry.
|Clay Friedman – Co-leader |
Clay is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. Informed by nearly a decade in a state attorneys general office, and more than 25 years in private practice, Clay spends much of his time representing clients in singular or multistate regulatory actions. Clay has repeatedly led teams before all 50 state attorneys general and also handles matters with the Federal Trade Commission, the Consumer Financial Protection Bureau, and other local, state and federal agencies.
|Stephen Piepgrass |
Stephen represents clients interacting with, and being investigated by, state attorneys general and other enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, particularly in heavily regulated industries.
|Michael Yaghi |
Michael handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
|Ketan Bhirud |
As a former government official at the state and federal level, Ketan leverages extensive experience in the public and private sectors to skillfully represent client interests.
|Avi Schick |
A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies.
|Chris Carlson |
Chris represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
|Natalia Jacobo |
Natalia is an associate in the firm’s business litigation practice. She recently received her J.D from the University of California, Davis School of Law.
|Namrata Kang |
Namrata is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. Her work includes advising clients in regulatory investigations and compliance matters, in addition to representing clients in civil litigation matters.
|Susan Nikdel |
Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes. Susan also represents banks, fintechs, and financial services companies in connection with regulatory examinations and investigations brought by the CFPB, state attorneys general, and the California Department of Financial Protection and Innovation.
|Whitney Shephard |
Whitney is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She represents clients facing state and federal regulatory investigations and enforcement actions, as well as related civil litigation.
|Trey Smith |
Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement practice. His experience includes serving as a summer associate at the firm in 2021.
|Daniel Waltz |
An experienced litigator, Daniel advises and represents regional, national and international companies, financial institutions and insurers in all facets of business, complex commercial and insurance coverage litigation. He is committed to working with his clients to find creative solutions to meet their needs.
|Stephanie Kozol |
Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.