Staffing agencies benefited from ‘no poach’ deal, state attorney general says

Kwame Raoul says six staffing firms and a client conspired to prevent workers from switching agencies to get a better offer.

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Illinois Attorney General Kwame Raoul

Illinois Attorney General Kwame Raoul

Ashlee Rezin/Sun-Times file

Illinois Attorney General Kwame Raoul has expanded his fight against temporary staffing agencies for allegedly using “no poach” agreements to keep workers from getting a better offer from a competitor.

Raoul has filed suit against six staffing agencies and a client, accusing them of colluding in violation of state antitrust laws. The suit in Cook County Circuit Court accuses the client, Hodgkins-based Vee Pak, of acting as a go-between for the agencies and enforcing their agreement not to hire or recruit one another’s workers. Vee Pak does business as Voyant Beauty.

Temporary workers used by Vee Pak who tried to jump between agencies in the alliance were fired or returned to their original agency, the complaint said. The charges involved work sites in Hodgkins and Countryside.

The suit follows a similar case Raoul’s office filed in 2020 against three staffing agencies and a client.

“No-poach agreements allow employers to take advantage of workers by trapping them in low-paying jobs and limiting their ability to seek better employment opportunities,” Raoul said in a news release.

Agencies named in the latest suit are Alternative Staffing in Cicero, American Quest Staffing Solutions in Berwyn, Creative Staffing Solutions in Burbank, Midway Staffing in Berwyn, Staffing Network in Oakbrook Terrace and SureStaff in Itasca. Vee Pak could not be reached for comment Friday. A spokesman for the Staffing Services Association of Illinois, representing the agencies, said it has not reviewed the lawsuit.

Raoul’s complaint alleged the collusion occurred from at least February 2016 to late 2019. “Numerous internal emails and emails exchanged between Vee Pak and the Agency Defendants evidence the conspiracy,” the complaint said. Court records show a hearing in the case is set for Sept. 23.

The Chicago Workers Collaborative, an organization that advances the interests of temporary and gig workers, praised the litigation. “We believe that these kinds of agreements are regularly happening between staffing agencies and employers, but it can be hard for workers to prove it.” said Jose Frausto, the group’s leadership and advocacy director.

Raoul’s earlier lawsuit involved the client Colony Display, working with the Midway agency as well as Elite Staffing and Metro Staff. The agencies argued that a loophole exempts them from Illinois antitrust law, but the Illinois Appellate Court rejected that argument June 3 and sent the case back to the trial court.

Because of that decision, temporary staffing firms face greater potential for antitrust enforcement actions, Raoul’s office said.

In separate allegations against Vee Pak, the company and the attorney general in 2020 settled charges that it retaliated against female employees who reported persistent and pervasive sexual harassment. The company admitted no wrongdoing but was required to implement new policies against harassment and retaliation.

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