In what is believed to be the federal government’s first criminal case alleging wage fixing, the former owner of a Dallas-area home health-staffing company was acquitted Thursday of conspiring with competitors to hold down the hourly rates paid to physical therapists and their assistants for home visits to Medicare patients.
A jury in the Sherman court of U.S. District Judge Amos L. Mazzant III found Neeraj Jindal of Flower Mound not guilty on three of four counts in a 2021 federal indictment.
Jindal, the former owner of Integrity Home Therapy, was convicted of one count of obstructing a proceeding before the Federal Trade Commission by making false statements and withholding information from the agency in 2017.
Paul Coggins of Locke Lord, Jindal’s principal attorney in the case, said he and his team will first focus on the potential sentence Jindal could receive on the obstruction count, then decide whether to appeal the conviction. By statute, the offense is punishable by up to five years in prison.
Significantly, Coggins said, the jury found that no wage-fixing had occurred because evidence at trial did not show that any of the five home-therapy staffing companies Jindal and an employee contacted by text acted on the suggestion that they agree to reduce the amount they paid workers because, as one text put it, “our margins are disappearing.” The staffing companies derive their profits from the difference between what they pay physical therapists and their assistants and what they charge the home-care agencies with which those therapy workers are placed.
“Actions speak louder than words,” Coggins said. “The evidence did not show that there were any non-competitive acts.” Despite what Coggins acknowledged were “unfortunate” suggestions by his client that the companies collude to hold down the wages of therapists and their assistants, “nobody did it,” he said. “There was no wage-fixing, because no one went along with it.”
Coggins, a former U.S. attorney for the Northern District of Texas, said the Federal Trade Commission previously handled complaints like that made against Jindal solely as administrative matters. This trial, he said, was the government’s first attempt at a criminal prosecution alleging a conspiracy to fix wages.
Said one attorney familiar with the case: “If the Department of Justice wanted to break new ground in criminal prosecution in this area, they should have picked a case with better facts than this one.”
The employee accused of aiding Jindal in the scheme, John Rodgers, was acquitted on all three criminal counts that named him as a defendant.
The government took solace in the jury’s one guilty verdict against Jindal. In a statement released Thursday, Holly Vedova, director of the FTC’s bureau of competition, said: “Today’s guilty verdict should serve as a warning to companies and their top executives that contemplate obstructing FTC investigations.” Such conduct, she said, threatens “the agency’s ability to protect competition and American consumers.”
In addition to Coggins, Jindal was represented by Locke Lord’s Jennifer McCoy, Bradley C. Weber and Brendan P. Gaffney.
Rodgers was represented by Brian D. Poe of Fort Worth.
In 2018, Jindal and the owner of another therapist-staffing company resolved an FTC administrative action by a consent agreement under which they pledged not to “lower, fix, maintain, or stabilize” the wages of their employees or payments to independent contractors. They were also barred from “inviting competitors to enter such agreements and from exchanging information with competitors related to compensation of employees and independent contractors.”