The Criminal Antitrust Anti-Retaliation Act establishes new federal protections for whistleblowers who report violations of antitrust laws. This may impact enforcement efforts and litigation on labor mobility issues, including no-poaching and wage-fixing agreements. Companies can prepare for the new legal standards by updating or enhancing their whistleblower programs and taking a holistic view of their compliance programs to meet new US Department of Justice Antitrust Division standards.
On three occasions since 2013, the US Senate unanimously passed the Criminal Antitrust Anti-Retaliation Act.[1] Upon each passage by the Senate, however, the US House of Representatives took no action.[2]
The Senate approved the whistleblower legislation for a fourth time on October 17, 2019.[3] On December 8, 2020, the House passed the legislation on voice vote.[4] The legislation was signed into law on December 23, 2020.
The act provides employees and other “covered individuals” with certain protections when they report what they “reasonably believe[] to be a [criminal] violation of[] the antitrust laws” to an appropriate entity (i.e., the government, an internal supervisor, or a company employee with authority to investigate the alleged allegations). The covered individuals—whistleblowers—have protections against retaliation by their employers as well as remedies for any retaliation suffered.
The act affords covered individuals, which include employees, contractors, subcontractors, and agents, protection against discrimination or reprisal from their employers for lawful actions that a covered individual took, or caused to be taken, to report conduct he or she reasonably believes to be a criminal antitrust violation.[5]
Protection applies to the reporting of the following:
The act provides similar protections to any covered individual who causes to be filed, testifies in, participates in, or assists with a federal government investigation or proceeding into any of the prior categories of covered conduct.[7]
Under the legislation, “antitrust laws” include “section 1 or 3 of the Sherman Act (15 U.S.C. §§ 1, 3).” Section 1 focuses on combinations or agreements in restraint of trade, which typically includes price fixing, bid rigging, and market allocation agreements. Section 3 focuses on combinations or agreements in restraint of trade in the District of Columbia (DC) or territories and monopolization in DC or territories.
One area of recent enforcement focus concerns competition and labor mobility. In 2016, the DOJ and Federal Trade Commission (FTC)—the two federal antitrust enforcement agencies—jointly issued Antitrust Guidance for Human Resource Professionals announcing their focus on reviewing wage-fixing and no-poach agreements.[8] Per the guidance, “An agreement among competing employers to limit or fix the terms of employment for potential hires may violate the antitrust laws if the agreement constrains individual firm decision-making with regard to wages, salaries, or benefits; terms of employment; or even job opportunities.” The guidance also noted that DOJ will bring criminal cases on conduct involving “naked wage-fixing or no-poaching agreement[s].”
The agencies have brought criminal and civil enforcement actions, which we previously noted, including the following:
While the protections the act offers are broad, there are several circumstances under which they are unavailable to a covered individual:
The act provides an administrative remedy and, in certain circumstances, relief through federal courts for covered individuals who experience reprisals after reporting (or engaging in other protected conducted related to) activity they reasonably believe constitutes a criminal antitrust violation or ancillary, but associated, criminal activity.[10] A covered individual may file a complaint with the US secretary of labor within 180 days of the alleged retaliation. If the secretary of labor has not rendered a final decision on the complaint within 180 days (other than due to the complainant’s bad faith), the covered individual may then bring an action at law or equity for the case to be reviewed de novo in federal court.[11] The covered individual may also choose for the complaint to remain in the US Department of Labor (DOL).
Whether a covered individual proceeds in court or within the Department of Labor, the legal standard will be the same. The covered individual will need to make a prima facie showing that he or she engaged in protected activity, that he or she suffered an adverse employment action, and that the protected activity was a contributing factor to the adverse action. If the covered individual makes such a showing, an employer can still avoid liability by showing, through clear and convincing evidence, that it would have taken the same “unfavorable personnel action” in the absence of the protected activity.
The act provides broad remedies for any covered individual who brings a meritorious claim alleging retaliation barred by the act. The available remedies include “all relief necessary to make the covered individual whole.”[12] The act specifically enumerates three remedies that shall be included in “all relief necessary”:
Beyond these broad remedies, the act makes clear that it does not diminish any rights available to a covered individual under other state or federal laws or operative collective bargaining agreements.[14]
The act will embolden antitrust whistleblowers to report activity they believe to be criminal that may previously have gone unreported for fear of retaliation. Implementing the following recommendations will help employers protect against the new avenues of antitrust exposure that may arise due to the act’s protections for reporting criminal antitrust activity and the prospect of damages actions for retaliation against whistleblowers:
Internal Reporting/Whistleblower Protocols
As the act provides protections to employees and other covered individuals regardless of whether they report activity they reasonably believe to be a criminal antitrust violation internally or to the government, now is an ideal time to update or enhance internal reporting systems. If employees trust internal whistleblower protocols, they will be more comfortable reporting potential violations internally, which can help companies manage their antitrust exposure by providing more flexibility over whether to pursue leniency or alternative defense or mitigation options. Key components of an effective internal reporting program include easy accessibility, confidentiality, independence, and responsiveness.
Antitrust Compliance Trainings
Regular antitrust trainings can help remind employees of the risks of communicating with competitors (particularly about competitively sensitive information such as pricing or output), and the risks of enforcement actions resulting in prison terms and criminal fines as well as corporate fines and follow-on civil actions.
Updating Antitrust Compliance Programs
Companies should take an independent, holistic view of their antitrust compliance programs, particularly based on specific factors that the Antitrust Division uses to evaluate the “[e]ffectiveness” of the programs.[15] The failure to do so at all, or until after an antitrust investigation commences, may result in a company being ineligible for obtaining credit for compliance programs at the charging stage, a possible deferred prosecution agreement, and a sentencing reduction. There is no one-size-fits-all compliance program, and an antitrust compliance program has unique elements that are considered by the DOJ.[16]
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Boston
Siobhan E. Mee
Daniel S. Savrin
London
Omar Shah
New York
Stacey Anne Mahoney
Lincoln Bisbee
Philadelphia
Brendan Fee
Sarah E. Bouchard
San Francisco
Brian Rocca
Colin West
Washington, DC
Bernard W. Archbold
Clay Everett
Ryan Kantor
Orange County
Daryl S. Landy
Princeton
Thomas A. Linthorst
Chicago
Ami N. Wynne
[1] S. 42, 113th Cong., 1st Sess., 159 Cong. Rec. S7799-7800 (Nov. 4, 2013) (passed with an amendment by unanimous consent); S. 1599, 114th Cong., 1st Sess., 161 Cong. Rec. S5474-75 (July 22, 2015) (passed with an amendment by unanimous consent); S. 807, 115th Cong., 1st Sess., 163 Cong. Rec. S7266-67 (Nov. 15, 2017) (passed without amendment by unanimous consent).
[2] 159 Cong. Rec. H6960, D1072 (Nov. 12, 2013); 161 Cong. Rec. H5409, D871 (July 23, 2015); 163 Cong. Rec. H9405, D1233 (Nov. 16, 2017).
[3] S. 2258, 116th Cong., 1st Sess., 165 Cong. Rec. S5904-05, D1121 (Oct. 17, 2019).
[4] S. 2258, 116th Cong., 2nd Sess., 166 Cong. Rec. H7007-09, D1059 (Dec. 8, 2020); see also Press Release, House Passes Antitrust Whistleblower Protections Authored by Grassley, Leahy (Dec. 8, 2020).
[5] Criminal Antitrust Anti-Retaliation Act, § 216(a)(1)(A)–(B)(ii).
[6] Id. § 216(a)(1)(A)(i)–(ii).
[7] Id. § 216(a)(1)(B)(i)–(ii).
[8] US Dep’t of Justice, Antitrust Div. & Fed. Trade Comm’n, Antitrust Guidance for Human Resource Professionals.
[9] Criminal Antitrust Anti-Retaliation Act, § 216(a)(2)(A)–(C).
[10] Id. § 216(b)(1)(A)–(B).
[11] Id.; see also Mark L. Krotoski & Bernard W. Archbold, Prospects Improve for Enactment of the Criminal Antitrust Anti-Retaliation Act of 2019, Competition Policy International (Dec. 15, 2019) (providing a detailed explanation of the act’s administrative review framework and available remedies).
[12] S. 2258 § 216(c)(1).
[13] Id. § 216(c)(1)–(2)(C).
[14] Id. § 216(d).
[15] See M. Krotoski, Landmark Antitrust Division Policy to Incentivize Corporate Compliance and Mitigate Antitrust Risk, Bloomberg Law (Oct. 2019) (summarizing elements of antitrust compliance programs based on new DOJ standards).
[16] See, e.g., Remarks of Brent Snyder, Deputy Assistant Attorney General, US Dep’t of Justice, Antitrust Div., Compliance Is a Culture, Not Just a Policy, at 4 (Sept. 9, 2014) (“Not all effective compliance programs are built alike. Compliance programs should be designed to account for the nature of a company’s business and for the markets in which it operates.”).