US Senate Passes Criminal Antitrust Anti-Retaliation Act

Morgan Lewis

Morgan Lewis

The US Senate on October 17 unanimously passed S. 2258, the Criminal Antitrust Anti-Retaliation Act of 2019 (the Bill).[1] The Bill, if enacted, would amend the Antitrust Criminal Penalty Enhancement and Reform Act of 2004,[2] and establish new whistleblower protections for employees, contractors, subcontractors, and agents of private employers (covered individuals) who report conduct that they reasonably believe is a criminal antitrust violation (or a non-antitrust criminal violation potentially committed in tandem with a criminal antitrust violation).[3] The measure has been sent to the US House of Representatives for consideration.

New Whistleblower Protections for Antitrust Criminal Cases

The Bill affords new protections to covered individuals who report alleged criminal violations to the federal government, an internal supervisor, or an internal employee with authority to investigate the potential criminal violation. The Bill also protects covered individuals who assist a federal government investigation or proceeding.[4]

The Bill prohibits employers from taking punitive action against a covered individual for reporting potential criminal antitrust violations, and provides a framework for redress—and associated remedies—when an employer penalizes a covered individual for reporting potential criminal antitrust violations. If enacted, the Bill would apply to any violations or omissions of criminal antitrust laws or which “the covered individual reasonably believes to be a violation of, another criminal law committed in conjunction with a potential violation of the antitrust laws or in conjunction with an investigation by the Department of Justice of a potential violation of the antitrust laws.”[5]

The Bill makes it unlawful for an employer to “discharge, demote, threaten, harass, or in any other manner discriminate against a covered individual in the terms and conditions of employment” for lawfully reporting potential criminal violations.[6] The whistleblower protections in the Bill do not cover individuals who have engaged in the underlying criminal conduct at issue.[7]

The Bill utilizes the existing rules and procedures under Section 42121(b) of Title 49, which provides protections for employees providing air safety information, with minor modifications, as the framework for antitrust whistleblowers to file administrative complaints with the Secretary of Labor where the underlying claims stem from antitrust-related whistleblowing.[8] Where a claimant prevails, the Bill’s general relief provision provides that a covered individual “shall be entitled to all relief necessary to make the covered individual whole.”[9] The three forms of compensatory damages included in the general grant of relief include, but are not limited to, (1) reinstatement with the same level of seniority; (2) back pay with interest; and (3) “compensation for any special damages . . . including litigation costs, expert witness fees, and reasonable attorney’s fees.”[10]

One question has been raised whether an antitrust whistleblower law would affect the US Department of Justice Antitrust Division’s Leniency Program, which allows the first company or individual to self-report a criminal antitrust violation to avoid criminal convictions, criminal fines, and incarceration of executives.[11] The Leniency Program provides protection for those engaged in criminal antitrust conduct. As noted, the whistleblower Bill does not apply to a covered individual who has participated in criminal antitrust conduct. Therefore, the Bill would provide a new avenue for the reporting of criminal antitrust violations.

Past History, Strong Bipartisan Senate Support, and Inaction in the House

In 2011, the Government Accountability Office (GAO) published a report recommending that Congress enact whistleblower protections for private sector employees who report criminal antitrust violations.[12] This report led to the first introduction of the legislation in 2012.[13] The primary sponsors have been Senators Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vermont).

The Criminal Antitrust Anti-Retaliation Act has enjoyed strong bipartisan support in the Senate for several years, only to die in the US House of Representatives. In 2013, 2015, and 2017, the Senate unanimously passed similar versions of the legislation.[14]

On September 17, Assistant Attorney General Makan Delrahim of the Antitrust Division of the US Department of Justice testified at an oversight hearing before the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights. During the hearing, Senator Grassley asked about the Bill and whether Assistant Attorney General Delrahim thought it would be helpful in pursuing antitrust violators. Assistant Attorney General Delrahim responded, “I think it would be helpful and I believe we have expressed support for that Bill. I will check on that and get back to you. It is a sound policy that would complement and further enhance our cartel enforcement activities.”[15]

Support for the Bill from the Antitrust Division significantly improves its chance of passing the House and being signed into law. We will continue to monitor developments on this legislation.

[1] S. 2258, 116th Cong., 1st Sess. § 216 (2019) (S. 2258); see also 165 Cong. Rec. S5904-05 (Oct. 17, 2019) (unanimous consent).

[2] Pub. L. No. 108-237, 118 Stat. 661 (2004).

[3] S. 2258, § 216(a)(3)(A) (defining “antitrust laws” as “section 1 or 3 of the Sherman Act (15 U.S.C. 1 and 3)”).

[4] Id. § 216(a)(1)(B)(i)-(ii).

[5] Id. §§ 216(a)(1)(A)(i)-(ii) & 216(a)(1)(B)(i)-(ii).

[6] Id. § 216(a)(1).

[7] Id. § 216(a)(2)(A)-(C).

[8] Id. § 216(b)(2)(B).

[9] S. 2258, 116th Cong., 1st Sess. § 216(c)(1).

[10] Id. § 216(c)(2)(A)-(C).

[13] S. 3462, 112th Cong., 2d Sess., 158 Cong. Rec. S5732 (July 31, 2012). Senator Kohl also joined as an original sponsor.

[14] See 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, 163 Cong. Rec. S7266-67 (Nov. 15, 2017) (passed without amendment by unanimous consent).

[15] Oversight of the Enforcement of the Antitrust Laws, Senate Judiciary Subcom. on Antitrust, Competition Policy, and Consumer Rights, 116th Cong. (2019) (testimony of Assistant Att’y Gen., Antitrust Div.) (hearing time 52:40-53:20).

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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