A Circuit Court of Cook County (Illinois) judge denied a motion to dismiss a lawsuit against a buyer of staffing services and three of its staffing providers brought against them by Illinois Attorney General Kwame Raoul, the attorney general’s office announced.
Raoul’s lawsuit alleges that the three staffing agencies — Elite Staffing Inc., Metro Staff Inc. and Midway Staffing Inc. — formed an unlawful agreement to refuse to solicit or hire the others’ employees and to fix employees’ wages. The buyer of their staffing services, Colony Inc., allegedly facilitated the agreement by acting as a go-between to communicate the agreement and assisted in enforcing the no-poach agreement.
Elite, Metro Staff and Midway provide temporary employees to complete light industrial work at Colony’s facilities in Elgin and St. Charles, Illinois. The lawsuit was initially announced in July 2020 [1].
“I am pleased with the court’s decision that prevents the companies’ attempt to shirk responsibility for taking advantage of Illinois workers through no-poach and wage-fixing agreements,” Raoul said. “I will continue to pursue this litigation, as well as my office’s work to protect Illinois’ workforce by ensuring that companies like Elite, Metro Staff, Midway and Colony are held accountable for exploiting workers.”
In their motion to dismiss, the defendants argued the Illinois Antitrust Act does not apply to labor services and outright exempts wage-fixing or no-poaching conspiracies. The circuit court rejected this argument [2] and confirmed that although the Illinois Antitrust Act protects legitimate labor union activities from antitrust liability, it does not contain a “blanket immunization” for any activity relating to labor services that would allow employers to fix wages and agree not to poach each other’s employees.
The court also held that Raoul properly alleged a conspiracy to eliminate competition on wages and the hiring of temporary workers, which if proven, would be presumed illegal under the Illinois Antitrust Act.
The lawsuit alleges that as early as March 2018, Elite, Midway and Metro Staff allegedly agreed to not hire, recruit, solicit or poach temporary workers from each other at Colony locations in order to restrict competition between the agencies. The agencies allegedly agreed to fix employees’ wages at a below-market wage at Colony’s request. If a temporary worker were to attempt to switch to another agency at the Colony location and the switch was noticed by another agency or Colony, the temporary worker would be returned to his or her original agency, the lawsuit says. According to the complaint, Colony helped enforce the agreement between the agencies by notifying each agency if one deviated from the agreement.
Raoul is seeking an injunction to stop the illegal agreements as well as civil penalties and damages.