AMN Healthcare contracted with Aya Healthcare for Aya to staff temporary “spillover assignments” of travel nurses to hospitals at which AMN was the managed service provider. In AMN’s agreement with Aya, Aya agreed not to solicit AMN’s employees; eventually, Aya became AMN’s biggest associate vendor. After Aya began to actively solicit AMN’s travel nurse recruiters, the parties’ business relationship “soured.” In this lawsuit, Aya challenged AMN’s nonsolicitation provision under the Sherman Antitrust Act and California law. The district court granted AMN’s summary judgment motion on the ground that Aya failed to raise a genuine issue of material fact regarding AMN’s “market power.”
The Ninth Circuit affirmed dismissal on summary judgment, holding that although the nonsolicitation agreement is a “horizontal restraint,” it is “reasonably necessary to the parties’ pro-competitive collaboration.” More specifically, the Court noted that “[t]he non-solicitation agreement, therefore, promotes ‘competitiveness in the healthcare staffing industry’ – more hospitals receive more traveling nurses because the non-solicitation agreement allows AMN to give spillover assignments to Aya without endangering its ‘established network of recruiters, travel nurses, AVs, and of course, hospital customers’” (quoting the district court’s opinion).