The recent Criminal Antitrust Anti-Retaliation Act (CAARA), to be enforced by the Occupational Safety and Health Administration (“OSHA”), offers protection from retaliation for antitrust whistleblowers who come forward to report possible criminal violations internally or directly to government authorities. Because CAARA does not offer additional monetary awards to encourage whistleblowers to bring cases to the government, the statute instead reinforces the ability of internal reporting mechanisms to effectively identify any potential antitrust concerns. Since employers will want complaints to be internal in the first instance, they should undertake a review of those internal reporting mechanisms to make sure reports do not result in retaliatory measures that could trigger a CAARA complaint.
We recently reported that on February 19, 2021, the Department of Labor tapped OSHA to investigate whistleblower complaints under two new statutes: the Criminal Antitrust Anti-Retaliation Act of 2019 (“CAARA”), which was signed into law December 23, 2020, and the Anti-Money Laundering Act of 2020 (“AMLA”). As a result, OSHA’s Whistleblower Protection Program now oversees whistleblower complaints brought under 24 different statutes. Under the current procedures, the Secretary of Labor may conduct an investigation into the purported violation unless the employer can show by clear and convincing evidence that it would have taken the same unfavorable personnel action in the absence of any purported protected behavior. Ultimately, whistleblowers may also have a path to file claims in federal court. Unlike some of the other statutes that OSHA enforces, though, CAARA does not include a compensation provision for criminal antitrust whistleblowers. This differentiating factor may be a benefit for employers in practice.
Whistleblower Incentives: No Whistleblower Recovery Under CAARA
CAARA specifically prohibits retaliation “in the terms and conditions of employment” of “employee[s], contractor[s], subcontractor[s], or agent[s] of an employer” for whistleblowing to the federal government or to the whistleblower’s employer. Notably, CAARA only offers criminal antitrust whistleblowers remedies intended to make them whole — such as providing back-pay and reinstating their jobs — while other whistleblower statutes offer additional awards in compensation.
In contrast, the AMLA, which passed in January 2021 as part of the National Defense Authorization Act for Fiscal Year 2021, offers both whistleblower protection and a monetary incentive of up to 30% of all monetary sanctions over $1 million recovered as a result of whistleblower tips. The AMLA is modeled after the Dodd-Frank SEC whistleblower program, which has prompted a significant increase in whistleblower tips and monetary awards, totaling approximately $728 million to 118 individuals. The lack of monetary incentive under CAARA casts some doubt as to whether it will be effective in practice.
DOJ Incentives: Encourage Whistleblowing and Self-Reporting
CAARA provisions align with the government’s interest in encouraging private citizens to help ferret out antitrust violations, and it is not the only recent effort aimed at citizen complaints. On February 24, 2021, DOJ dusted off its citizen education materials and updated its primer on Price Fixing, Bid Rigging, and Market Allocation Schemes: What They Are and What to Look For. Similarly, the Antitrust Division’s Procurement Collusion Strike Force encourages citizen complaints with a big red link in the middle of its website, which leads to a complaint form that can be completed and submitted electronically to DOJ.
Employer Incentives: Improve Compliance and Keep Reporting Internal
For employers, CAARA dovetails with the DOJ Antitrust Division’s 2019 policy shift regarding the evaluation and treatment of corporate compliance programs. In July 2019, DOJ’s Antitrust Division announced an updated policy to encourage corporate compliance. Under the new policy, the Division may consider mitigation credit for robust and effective compliance efforts at the charging stage as well as the sentencing stage of an enforcement action. This shift introduced Deferred Prosecution Agreements (“DPAs”) to antitrust enforcement for the first time, and DPAs have already played a large role in ongoing enforcement like in the generic drug investigation for price-fixing, bid-rigging, and customer allocation.
CAARA gives employers additional incentive to implement compliance programs that encourage employees to report concerns internally in the first instance. There are many reasons that an employer would want to know about possible violations before the government does. In the antitrust context, prompt internal detection of potential misconduct means that the employer may be well-positioned to self-report and seek leniency from prosecution under the Antitrust Division’s Corporate Leniency Program.
In the wake of CAARA, employers should consider taking a fresh look at their antitrust compliance program and policies with an eye towards bolstering the ways in which employees can quickly — and without fear of retaliation — alert the company to possible wrongdoing. Given the lack of compensation incentive under CAARA in comparison to False Claims Act or AMLA whistleblowing, employer efforts may pay off.