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Duke agrees to pay $54.5 million to settle class action lawsuit

Duke and the Duke Health System have agreed to pay $54.5 million to settle a case in which they and the University of North Carolina at Chapel Hill were accused of antitrust collusion.

The court granted the settlement preliminary approval May 20 for the case, which was filed four years ago. In the class action lawsuit Seaman v. Duke University, Danielle Seaman—an assistant professor of radiology at Duke when she filed the case—alleged that Duke and UNC agreed not to hire each other's employees, which would violate federal antitrust laws protecting competition and wages.

The settlement works out to about $10,000 per person involved in the class action suit. 

In addition to the eight-figure payout, Duke also agreed to appoint an antitrust compliance officer, train personnel on antitrust rules and permit the Department of Justice to inspect documents or interview employees, as well as enforce the terms of the settlement. 

In an email to The Chronicle, Michael Schoenfeld, vice president for public affairs and government relations, wrote that Duke "denies all the allegations of wrongdoing and claims of liability in this case."

"We are settling this case to avoid the wasteful cost and inconvenience of prolonged litigation, which will divert Duke’s resources and attention away from our core missions of educating students, treating patients and creating new knowledge that will improve health and wellness," his statement read. "We will continue to vigorously compete for the best faculty who will help fulfill these missions. The University is and has been committed to complying with all relevant laws in recruiting the most talented physicians, scientists and scholars. Our agreement with plaintiffs and the Department of Justice to implement certain compliance measures affirms that commitment."

In May 2015, Seaman filed a lawsuit saying that she had lost an employment opportunity because of an alleged no-hire pact between Duke University School of Medicine and the UNC School of Medicine. Because this applies only to faculty, non-faculty members of the Duke University Health System were not affected.

Such an agreement would prevent employees from leveraging a job opportunity at the other university to better their salaries or receive a promotion.

Because it is an actor of the state government, UNC settled the lawsuit in January 2018 without paying any money or admitting wrongdoing. However, it agreed to never enter a no-hire agreement and provide information to Seaman's attorneys.

The case became a class action lawsuit in February 2018, and thus covered around 5,500 faculty physicians at both medical schools. 

This settlement is not Duke's first of the year. Duke settled another lawsuit in March involving allegations of research fraud. The University will be paying $112.5 million to the federal government for its alleged handling of falsified data that was involved with federal research grants allegedly amounting to $200 million.

Editor's Note: This article has been updated with the statement to The Chronicle from Schoenfeld.

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