Summer Lee Joins Workers, Unions as they File Groundbreaking Antitrust Complaint Against UPMC, Asking U.S. Department of Justice to Investigate Pennsylvania’s Largest Private Employer 

**FOR IMMEDIATE RELEASE**

SEIU Healthcare Pennsylvania and the Strategic Organizing Center 

For Immediate Release: May 18, 2023 

Read Full Complaint Here

Contact: Emilia.Rowland@mail.house.gov 330.212.2065

Summer Lee Joins Workers, Unions as they File Groundbreaking Antitrust Complaint Against UPMC, Asking U.S. Department of Justice to Investigate Pennsylvania’s Largest Private Employer 

Workers’ organizations claim hospital giant’s mobility restrictions, labor law violations violate federal antitrust law

WASHINGTON– Today, Congresswoman Summer Lee (D-PA) joined SEIU Healthcare Pennsylvania and the Strategic Organizing Center Thursday filed a groundbreaking antitrust complaint against UPMC–Pennsylvania’s largest private employer–calling on the U.S. Department of Justice to investigate the hospital giant’s alleged abuse of market power against workers and patients.

In a 55-page complaint, the two worker organizations allege that UPMC not only acquired monopolies and their equivalent in labor markets – monopsonies – in several Pennsylvania hospital markets, but also took anticompetitive actions that maintained and expanded those monopsonies over workers, in violation of federal antitrust laws. 

If you would like to access a recording of the press call featuring UPMC workers, U.S. Rep. Summer Lee, and Matt Yarnell, President of SEIU Healthcare Pennsylvania, please click here.

UPMC has created an anticompetitive tsunami, according to the complaint, using a dominant market position to allegedly suppress wages and increase workloads, and then lock workers into substandard conditions by restricting their movement and illegally retaliating against workers who speak out for better conditions.

“Nowhere has UPMC exercised its dominance more aggressively than in labor markets, where UPMC’s monopsony power has enabled UPMC to suppress workers’ wages and benefits, drastically increase their workloads, and prevent workers from exiting or improving these working conditions through a draconian system of mobility restrictions and widespread labor law violations that lock-in sub-competitive pay and working conditions,” the complaint alleges.



The complaint breaks new ground in asserting that labor law violations should be considered a form of anticompetitive conduct. Specifically, the complaint alleges mobility restrictions–including non-compete clauses and an alleged “Do Not Rehire” program for employees who leave their jobs– and suppressing workers’ efforts to improve their working conditions are anticompetitive actions that violate federal antitrust law.

“Workers have only two ways to compete for jobs: they can leave their current job and look for a better one, or they can stay and try to obtain better working conditions,” said Matt Yarnell, president of SEIU Healthcare Pennsylvania. “We believe UPMC is cutting off both of these avenues of competition, giving it a huge advantage in Pennsylvania labor markets, and harming workers, patients and competition overall. Today we are seeking action to end these abuses.” 

Thursday’s complaint follows a 9-month investigation by SEIU Healthcare Pennsylvania and the SOC and comes as UPMC has grown exponentially in the last two decades. UPMC now dominates hospital markets in Pittsburgh and much of Pennsylvania, employing 92,000 workers. Its annual revenue is more than $26 billion, and it owns 40 hospitals and more than 800 outpatient facilities. 

“UPMC has created the perfect anti-competitive storm, where it has grown too large and dominant over hospital markets and hospital workers,” said Michael Zucker, executive director of the SOC. “And we believe it has used that power to hold down wages and reduce staffing levels – while also preventing workers from speaking out to make any changes. It is time for regulators to step in, investigate, and challenge this anticompetitive conduct.”

A WAGE PENALTY 

As UPMC has grown, it has suppressed wages and working conditions, the complaint alleges. It includes a wage study from the economics firm Econ One Research that shows UPMC workers across all job categories earn less on average than workers at other, comparable hospitals. UPMC hospital workers overall suffer a 2 percent wage gap on average, according to the Econ One study. 

This wage gap or “wage penalty” was much higher for certain categories of workers: LPNs had an average wage penalty of $1.31 per hour, and direct care contract workers had almost a nine-dollar per hour wage penalty. Low-wage workers as a group also experienced a wage penalty of more than $1 per hour.

The wage study also showed a correlation between UPMC’s market share and this wage penalty, showing that for every 10 percent of UPMC’s market share, the wage penalty is worse by between 30 and 57 cents per hour. This wage suppression translates into significant wage gaps for UPMC workers – especially in places where UPMC has 50 percent and even more of market share, like Pittsburgh, Altoona, and Williamsport. 

The wage penalty data, as the wage study reports, provide direct evidence supporting the conclusions that UPMC has market power in labor markets where it operates, and UPMC has potentially leveraged its market power to artificially suppress wages for its workers, thus injuring competition.

“If, as we believe, UPMC is insulated from competitive market pressures, it will be able to keep workers’ wages and benefits – and patient quality – below competitive levels, while at the same time continually imposing further restraints and abuses on workers to maintain dominance in the markets where it operates,” the complaint alleges.

‘SHOCKINGLY HIGH’ FEAR OF RETALIATION

In addition to suppressing wages, the complaint alleges UPMC has strengthened its possible monopsony power by further reducing workers’ effective pay via chronic understaffing and increased workloads at its hospitals. The complaint provides evidence that UPMC staffing ratios correlate with its market power: As UPMC’s market share has grown over time, its staffing ratios have fallen steadily over the last 10 years; even while the staffing ratios at other Pennsylvania hospitals have, on average, steadily increased. As of 2020, UPMC ratios were on average 19 percent lower than the average non-UPMC staffing ratios. UPMC’s 2020 staffing ratios are the worst in the markets where it has the highest market shares, and they are significantly better where UPMC has lower market share. 

UPMC has also prevented workers from leaving UPMC jobs through non-compete restrictions on doctors and an alleged unwritten “blacklisting” practice under which workers who leave UPMC report they cannot be rehired anywhere in the UPMC system. 

Workers also report persistent interference with their labor rights, with UPMC racking up 133 separate charges of unfair labor practices since 2012. UPMC’s continued and systematic labor law violations prevent workers from seeking and bargaining for better working conditions, and therefore allow UPMC to reinforce and expand its power over workers and working conditions. 

“After I spoke out about unsafe staffing, management canceled my contract and I was unable to get a job anywhere in the UPMC system,” said Dina Norris, who worked as a contract nurse in a trauma unit for UPMC Altoona. “Since UPMC is the dominant employer where I live, I had to take a job with another hospital system and drive 165 miles each way to get to work and home.” 

A worker survey cited in the complaint reveals a “shockingly high level of concerns regarding potential retaliation for raising issues regarding working conditions.” UPMC workers who responded to the recent survey reported overwhelming levels of fear regarding retaliation, with 74 percent of UPMC workers responding they believe they could suffer negative consequences for raising issues about working conditions with management, and nearly all UPMC workers – 92 percent – reporting that they believe they may experience negative consequences or that UPMC may retaliate against them for supporting union organizing at their job. 

The complaint also alleges that UPMC engaged in a pattern of potentially anticompetitive hospital acquisitions – acquiring 17 hospitals in 10 years in Pennsylvania – and subsequently reduced those hospitals’ capacity, closing four hospitals and downsizing three others and eliminating 353 beds and 1,367 full-time and 433 part-time jobs at those closed and downsized facilities. Reducing capacity is a classic means by which monopolists and monopsonists exercise market power anticompetitively. 

The complaint comes amidst a resurgence of interest in antitrust enforcement on the part of regulators, including particular interest in labor antitrust issues. The DOJ has pursued a number of labor-side antitrust matters, including criminal no-poach cases, and last October prevailed in one of the few labor-side antitrust cases, successfully blocking the merger of Penguin Random House and Simon & Schuster by asserting the combination would harm authors. The FTC has also issued a proposed rule that would ban most non-compete restrictions on workers that attracted more than 25,000 public comments. 

“My hometown Braddock lost our only hospital and largest employer back in 2010 for the same reason McKeesport is closing their ICU this year,” said U.S. Rep. Summer Lee (D-Pittsburgh). “It’s the same reason Western PA is facing a hospital staffing crisis that’s putting our loved ones’ lives at risk–and the same reason our nurses and health aides, who are paid so little that they’re in medical debt to the hospital they work for, face retaliation for speaking out for their patients being ripped off by skyhigh health care costs and declining quality of care: UPMC is abusing its power to exploit its workers and patients on the backs of taxpayers. I’m proud to stand alongside our hospital workers as they demand accountability and take their fight to Washington.”

SEIU Healthcare Pennsylvania is the largest union of healthcare workers in Pennsylvania. The SOC is a democratic coalition of labor unions, including SEIU, representing millions of working people and is dedicated to improving their lives. 

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