SEATTLE – Attorney General Rob McKenna today announced a settlement that addresses concerns surrounding the merger of the nation’s two largest school bus contractors. Eleven states reached an agreement with Laidlaw International, Inc., and FirstGroup plc to help ensure that school districts can still receive competitive bids for student transportation.
Jonathan Mark, an assistant attorney general with the Attorney General’s Antitrust Division, represented Washington in the settlement negotiations.
“Laidlaw and FirstGroup are the major school bus operators in Washington and compete heavily for district contracts,” Mark said. “Today’s settlement will help ensure that our schools benefit from competitive bidding after these companies merge. The agreement creates opportunities for additional companies to do business in Washington.”
FirstGroup, a public limited company in Scotland with headquarters in the UK, announced in early February that it plans to acquire Laidlaw, a Delaware corporation with headquarters in Naperville, Ill.
Washington and 10 other states filed a complaint in U.S. District Court in Massachusetts, contending the proposed merger violated federal and state antitrust laws. Under Washington law, school districts can provide student transportation themselves or allow private companies to compete for a contract.
The participating states reached an agreement with the companies in the form of a consent decree filed today with the complaint. Pending final approval by the court, the consent decree requires Laidlaw to divest contracts for student transportation services in certain districts where it now provides service – including the Seattle, Rochester, Battle Ground and Hockinson school districts. The Attorney General’s Office may also order a partial divestiture in the Tacoma school district at a later date.
Additionally, the companies will be required to make bus depots and/or maintenance facilities in the Spokane, Tacoma and Vashon Island school districts available to school districts or competing bidders.
FirstGroup and its subsidiaries must provide the Attorney General’s Office with advance notice of future acquisitions. The agreement also prevents them from threatening to withdraw bids in order to force districts to amend contract terms and places limitations on their ability to impose non-compete agreements on employees.
The agreement does not prevent FirstGroup or its subsidiaries from bidding on contracts in the future, including those divested to competitors.
The investigation was conducted by the states in cooperation with the U.S. Department of Justice. In addition to Washington, the following states signed onto the agreement: Alaska, California, Connecticut, Illinois, Massachusetts, Maine, Minnesota, Missouri, New Jersey and Rhode Island. Washington is expected to receive approximately $100,000 of the $1.1 million in attorneys’ fees awarded under the agreement.
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