Good Neighbors or Conspirators?

Colleges and universities lure top faculty members away from competitor institutions all the time, and the practice is (generally speaking) entirely legal. But while some relish it, others consider faculty poaching, or actively recruiting faculty members from competitors, bad form and try to avoid doing it regularly -- especially to institutions in the same geographic area.

A new antitrust lawsuit alleges much more than a neighborly understanding between Duke University and the University of North Carolina at Chapel Hill, however. The suit, brought against Duke by a medical faculty member there, rather alleges a binding no-hire agreement between the two Research Triangle institutions prevented her from getting a job at Carolina that otherwise would have been hers. The faculty member alleges there are others like her, and she’s proposed a class action.

Danielle Seaman, an assistant professor of radiology at Duke, says she’s been trying to get a job at Carolina for three years. She allegedly interviewed and was told by Carolina's chief of cardiothoracic imaging in 2015 that her otherwise strong chance had been rejected because the respective deans of the medical schools at Carolina and Duke had a few years earlier formally agreed to not hire faculty members between institutions at the same rank, in order to control faculty salaries.

“Defendants’ conspiracy was an ideal tool to suppress their employees’ compensation,” reads Seaman’s complaint, an original version of which was filed in a federal court in June; an amended complaint was filed earlier this month. “Whereas agreements to fix specific and individual compensation packages would be hopelessly complex and impossible to monitor, implement and police, eliminating entire categories of competition for skilled labor (that affected the compensation and mobility of all employees in a common and predictable fashion) was simple to implement and easy to enforce.”

As proof of the agreement, Seaman cites a series of emails she received from Carolina’s chief of cardiothoracic imaging from 2012 through this spring. The first, sent just after Seaman participated in an informal interview lunch at Carolina, said, “It was a pleasure meeting you and getting to know you. I believe that you would fit in very nicely with our cardiothoracic imaging group at Carolina. I will be sure to keep you apprised should a position become available.”

In a second email, sent in February after Seaman expressed interest in applying for an advertised position as a thoracic radiologist, the chief said he was prohibited from hiring her.

“I agree that you would be a great fit for our cardiothoracic imaging division,” the chief allegedly wrote. “Unfortunately, I just received confirmation today from the dean’s office that lateral moves of faculty between Duke and [Carolina] are not permitted. There is ‘reasoning’ for this guidance which was agreed upon between the deans of [Carolina] and Duke a few years back. I hope you understand.”

In a third clarification email sent in April, the chief allegedly wrote that “the ‘guideline’ was generated in response to an attempted recruitment by Duke a couple of years ago of the entire [Carolina] bone marrow transplant team; [Carolina] had to generate a large retention package to keep the team intact.”

Seaman says that the alleged agreement amounts to illegal conspiracy on the parts of Duke and Carolina to suppress employee compensation, and to “impose unlawful restrictions on employee mobility.”

“Because [Duke] and [Carolina] are the two largest academic medical systems in the state, their no-hire agreement has reduced competition for medical facility faculty and certain staff, thereby suppressing faculty and staff pay,” the suit says.

Seaman says the job would have been hers if not for the no-hire agreement. A third unnamed colleague in radiology at Carolina allegedly confirmed via email the existence of the agreement, saying she’d been told by the chief of cardiothoracic imaging and the department chair of radiology that two medical school deans agreed they would “not hire each other’s faculty in a lateral move -- only way they can hire each other’s faculty is if there is an upward move, i.e. a promotion.”

The colleague allegedly added, “I told [the chief of cardiothoracic imaging] that you’re a way stronger candidate than either of the two folks that we have interviewed for the job.”

Seaman is seeking a trial by jury to prove that the alleged conspiracy violates antitrust and restraint of trade laws, along with three times the amount she suffered in damages, plus other relief.

Spokespeople at both Duke and Carolina declined comment Friday, saying they couldn't comment on pending litigation.

Seaman’s case has been picked up by a Silicon Valley-area law firm that successfully litigated a recent nonsolicitation class action lawsuit on behalf of employees at major local technology firms. Dean Harvey, an attorney at Lieff, Cabrasier, Heimann and Bernstein, in San Francisco, said the employers in Seaman’s case acted even more “egregiously” than the tech firms that recently settled for a proposed sum of $415 million, in that they pledged not only not to solicit each other’s employees but not to hire them at all for lateral moves (without a promotion).

“Faculty members are entitled to a competitive marketplace for their talent,” Harvey said. “They have the same rights as any other workers, and although higher education institutions can be a little cloistered at times, they face the same rules and laws as everybody else.”

Normally poaching involves faculty movement from poorer, often public institutions, to wealthier private ones that presumably can afford to pay more. So Seaman’s case is somewhat unusual in that it involves a faculty member wanting to move from a wealthy private institution to a public one that’s still relatively well-off but that has been hit hard by state budget cuts. The average assistant professor salary at Duke last year, for example, was $105,400 -- a 5.2 percent increase from the year before, according to data from the American Association of University Professors available on Inside Higher Ed. At Carolina, it was $81,600, representing a 2 percent year-over-year increase. Of course, salaries for medical faculty members skew higher; assistant professors of radiology at Carolina made $114,801 on average in 2014, according to information from the university. A spokesman for Duke declined to provide that information.

It's also worth noting that's sometimes faculty members don't intend to move, but seek out other offers merely to get retention salary adjustments. 

It’s unclear from the suit exactly why Seaman wanted a job offer from Carolina. It says she began working at Duke in 2011 and in December of that year contacted Carolina to express interest in working there.

Harvey said that Seaman's circumstances aside, there may be many other professors who were prohibited from moving in the opposite direction, from Carolina to Duke -- hence the proposed class action. Seaman’s legal team is in the process of identifying other affected parties. Harvey also said it’s possible that the scope of Carolina and Duke’s understanding may have extended beyond their medical schools.

A recent article in the Duke student newspaper, The Chronicle, for example, quotes two former administrators who said they tried to avoid poaching from Carolina in general.

“The general rule was that we didn’t recruit there and they didn’t recruit at Duke -- it certainly was in the years I was in the administration,” John Burness, former senior vice president for public affairs and government relations from 1991 to 2008, told the Duke paper. “I don’t know if it’s ever been a formal agreement, but it’s certainly been a practice over a long period of time.”

Burness, who is now a visiting professor of the practice at Duke’s Sanford School of Public Policy, in an interview confirmed those statements. He said it was generally recognized that both universities benefited from collaboration to advance teaching and research in the Triangle, and that poaching detracted from those goals. “Having a strong University of North Carolina was actually an advantage to Duke, not a disadvantage,” he added.

But Burness -- while not ruling out that it had ever happened -- said he'd never seen a Carolina faculty member specifically turned down for a job under the kind of no-hire agreement Seaman alleges.

Michael A. Olivas, the William B. Bates Distinguished Chair in Law at the University of Houston Law Center and director of its Institute for Higher Education Law and Governance, and former general counsel for the AAUP, said there’s no law or AAUP policy for or against faculty poaching. (There is, however, an AAUP-supported deadline of March 15 for faculty offers to prevent leaving institutions in the lurch as professors accept late offers.) Gentlemen’s agreements between peer institutions in the same region may exist to prevent the constant flow of faculty between institutions or to the wealthier ones, but it’s hard to say how common they are, he said. And Olivas said he'd never heard of one that was binding.

So Seaman has an unusually high burden of proof in her case to show that a formal agreement existed between the two universities and that she would have otherwise been offered the Carolina job, Olivas said. That amounts to more than a few expressions of mutual interest and lunch meetings.

“I’m not sure all the facts are yet known on this,” he said. “No one has a right to a job and I wouldn’t have thought that [Carolina] would have pursued any discussions with a [Duke faculty member] whatsoever if they are in fact parties to such an agreement.”

Olivas compared Seaman’s case to a recent one involving a faculty member at the University of California at San Diego who wanted to move to the University of Southern California and bring his entire Alzheimer’s research lab with him. A judge last month granted San Diego a temporary injunction to restore control over a massive database of research on Alzheimer’s disease. Olivas said that case likely involved comity or mutual courtesy principles since a whole lab was at stake.

San Diego’s lawsuit charges that Southern California used some employees as “double agents” to try to get other employees and research funders to move upstate with the project, but USC denies wrongdoing and says that San Diego is upset at having lost the star researcher in question, Paul Aisen. It’s now countersuing San Diego, alleging that San Diego has harmed Aisen’s reputation and violated his academic freedom in trying to prevent him from leaving.

Robert O’Neil, a former president and professor emeritus of law at the University of Virginia, offered some insight into in the administrative side of comity in regard to staff and faculty poaching. He said he sees it as a good thing.

Presidential comity “mostly maintained not only civility, but deference among colleagues,” O’Neil said, recounting an incident in which another president accepted with “eminently good humor” Virginia’s nearly simultaneous offers to an athletic director and chief of medicine and health affairs. “He did ask in jest when I would send him a star quarterback -- a hope for reciprocity in which I failed.”

O’Neil elaborated via email, “There are quite proper limits (reinforced by AAUP's ethical constraints) on unconscionably late resignations and other collegial constraints such as dramatic salary differentials, but the rules are modest. Such movement occurs so regularly that most presidents simply accept even the occasional transfer of entire faculty or research teams.”

Over the years, O’Neil said, “I've lost a few rounds and just as consistently gained a few. Life goes on, and in my view -- despite the Duke/[Carolina] litigation -- [faculty and staff transfers] is one area in which higher ed works remarkably smoothly.”