Protection for Criminal Antitrust Whistleblowers Signed into Law

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Largely overshadowed by the rise in COVID-19 deaths and the January 6, 2021, siege on the Capitol, the Criminal Antitrust Anti-Retaliation Act of 2019 (“the Act”) became law on December 23, 2020. See 15 U.S.C. § 7a-3. The Act, which Senator Chuck Grassley sponsored, prohibits employers from retaliating against individuals who report criminal antitrust violations to their employer or the federal government, or who participate in a federal governmental criminal antitrust investigation or proceeding.  

Background

The Act’s co-sponsor, Senator Patrick Leahy, introduced the Act in 2012 as an answer to a 2011 Government Accountability Office report calling for whistleblower protections for individuals who report criminal antitrust violations. Although the Senate unanimously passed prior iterations of the Act in 2013, 2015, and 2017, the House of Representatives never voted on them. The House finally gave the Act a nod in the 116th congressional session following the Department of Justice’s successful 2018 prosecution of a $236-million bid-rigging scheme, which stemmed from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.

The Act will be the 24th whistleblower statute enforced by OSHA and largely tracks the general contours of many of the other whistleblower statutes, such as the Sarbanes-Oxley Act of 2002 (SOX), in terms of its filing deadline and kick-out provision. Additionally, as further discussed below, the Act directly adopts the causation standard and burden-of-proof framework provided in the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21), which prohibits discrimination against air carrier industry employees who report information related to air carrier safety. Thus, although the applications and enforcement of the Act remain to be seen, case authorities under similar statutes will be informative in developing responses to claims brought under the Act.

Overview

The Act amends the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 by adding Section 216, “Anti-Retaliation Protection for Whistleblowers.” The Act makes it unlawful for employers to take adverse action (discharge, demote, suspend, threaten, harass, or in any other manner discriminate) against individuals covered by the Act who provide information relating to criminal antitrust violations to their employer or to the federal government. The Act also prohibits retaliation against individuals who participate in a federal investigation or proceeding filed or about to be filed relating to criminal antitrust violations. An actual criminal prosecution is not required as long as the subject matter of the whistleblower’s report would be a crime if the report were accurate, and the employee reasonably believes that the report involves a crime under the anti-trust laws (bid-rigging, price-fixing, and similar conspiracies).

Important Definitions

Under the Act, criminal antitrust violations include violations of sections 1 or 3 of the Sherman Antitrust Act. The term “violation” does not include a civil violation of any law that is not also a criminal violation.

Notably, the Act broadly defines “covered individuals” as “an employee, contractor, subcontractor, or agent of an employer.” Covered individuals are, however, precluded from seeking relief under the Act if the covered individual planned and initiated (1) a violation or attempted violation of the antitrust laws; (2) a violation or attempted violation of another criminal law in conjunction with a violation or attempted violation of the antitrust laws; or (3) an obstruction or attempted obstruction of a DOJ investigation of a violation of the antitrust laws.

Procedure

Covered individuals may seek relief by either (1) filing a complaint with the Secretary of Labor—through OSHA—not later than 180 days after the date on which the violation occurs or (2) bringing an action at law or equity for de novo review in the appropriate U.S. district court, which shall have jurisdiction over such an action without regard to the amount in controversy if the Secretary of Labor has not issued a final decision within 180 days of the filing of the complaint and there is no showing that such delay is due to the bad faith of the claimant.

Burden of Proof

The burden for covered individuals seeking relief is to make a prima facie case that their protected activity was “a contributing factor” in the alleged adverse action the employer took against the individual. If the employer demonstrates by clear and convincing evidence that “the employer would have taken the same unfavorable personnel action in the absence” of the protected activity, the DOL cannot provide relief for the covered individual. This is the causation standard and burden-shifting mechanism provided by AIR21, which is the standard and mechanism adopted by several other whistleblower statutes, such as SOX, the Federal Railroad Safety Act, and the Taxpayer First Act.

Remedies

A covered individual who prevails in an action brought under the Act “shall be entitled to all relief necessary to make the covered individual whole.” The Act also specifically provides that any relief shall include (1) reinstatement with the same seniority status that the covered individual would have had, but for the adverse action; (2) an award of back pay, with interest; and (3) compensation for any special damages sustained as a result of the discrimination, including litigation costs, expert witness fees, and reasonable attorney’s fees.

Takeaways

Employers should be particularly aware of the broad definition of covered individuals and take care to avoid retaliatory actions against any covered individual who complains about a possible criminal antitrust violation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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