Duke University to Pay $54M to Settle Suit Over Hiring Agreement with UNC

Duke University is agreeing to pay $54.5 million to settle claims that it and nearby University of North Carolina conspired to hold down salaries of medical professors by agreeing not to hire staff away from each other.

Lawyers for the former Duke radiology professor who filed the class-action lawsuit called the average $10,000 projected for more than 5,400 current and former workers one of the largest for employees claiming violations of federal anti-trust laws.

A similar lawsuit against eBay Inc. accusing the company of agreeing with the Intuit software company not to recruit each other’s employees was settled by eBay paying $134 per injured worker, attorneys for former Duke physician Dr. Danielle Seaman said in a court filing.

Seaman’s attorneys now must persuade the federal judge in charge of the case that the settlement terms are fair, reasonable, and adequate to the faculty at Duke and UNC’s Chapel Hill campus who taught at either school since 2012. Seaman could get up to $125,000 under the agreement.

Duke and UNC have denied that top administrators had a deal not to hire away staff for similar roles, but allowing doctors and nurses to move for promotions. Duke said last week the university decided to settle to avoid the cost and trouble of prolonged litigation. University spokesman Michael Schoenfeld said the money will not come from tuition, gifts or research grants,” but otherwise declined to specify the source of the funds.

UNC was dropped as a defendant last year after the public university’s hospital, medical school and administrators agreed to provide documents Seaman’s lawyers could use in their case against Duke, a private school about 10 miles (16 kilometers) away. Seaman’s lawyers made the deal in part because UNC, as a public institution, could invoke constitutional limits on federal lawsuits against states.

“The result is remarkable considering that the alleged conspiracy involved nonprofit defendants, only half of which (Duke) could be held liable for money damages,” Seaman’s lawyers said.

Duke, like UNC, agreed in its settlement that it would not participate in any unlawful restraints on competition.

The U.S. Justice Department said last month it would oversee the settlement as it enforces federal antitrust laws barring anti-competitive agreements.

Evidence produced in the case showed the heads of the two medical schools discussed the agreement not to poach each other’s medical professors at two meetings in 2004, but the agreement may have dated to the 1990s, Seaman’s attorneys said.

The case sprang from Seaman’s thwarted effort to move from her position at Duke to a similar job at UNC.

“I agree that you would be a great fit for our cardiothoracic imaging division. 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,” UNC cardiothoracic imaging chief Dr. Paul Molina wrote in a 2015 email.

Disappointed, Seaman wrote that “there are only two academic centers in this area where I could work, and I am already at one of them.”

Molina then said the agreement was reached to reduce competition and costs after a previous effort by Duke to recruit UNC faculty.

Molina and every other witness interviewed under oath denied there was any conspiracy, and there were few documentary sources of evidence describing a no-poaching agreement between the medical schools, Seaman’s attorneys said.

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