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On January 22, 2013, Sens. Patrick Leahy (D-VT) and Chuck
Grassley (R-IA) reintroduced legislation to the Senate Judiciary
Committee that would extend whistleblower protections to employees
who provide information to federal prosecutors in criminal
antitrust investigations.1 If passed, the Criminal
Antitrust Anti-Retaliation Act of 2013 ("Act") would
allow employees to file a complaint with the U.S. Department of
Labor about suspected retaliation for cooperating with the
Department of Justice.
The Act would amend the Antitrust Criminal Penalties Enforcement
and Reform Act, which protects guilty informants through the
Antitrust Division's Leniency Program. The Act would apply to
innocent third parties who come forward and report antitrust
violations. Also, as written, the Act would protect any individual
except those who "planned and initiated" the
antitrust conspiracy (emphasis added). This narrow limitation
allows for protection of a broad class of employees who may not
only have violated company policies but may even have acted in
their own personal interest rather than in the best interests of
the company.
The effort to introduce the Act was the result of a July 2011
Government Accountability Office study that stated: "Without
civil remedy for those who are retaliated against as a result of
reporting criminal antitrust violations, whistleblowers are
currently unprotected and may therefore be hesitant to report
wrongdoing to DOJ."2 The GAO's research found
that there was no consensus among key stakeholders interviewed
(antitrust plaintiffs' and defense attorneys among others)
regarding the addition of a whistleblower reward, but there was
wide support for adding anti-retaliatory protection. Sens. Leahy
and Grassley reported that the Act would create whistleblower
protections modeled on those in Sarbanes-Oxley, the 2002 financial
accounting and corporate governance reform law that both senators
played a role in drafting.3
Leahy has expressed that "Congress should encourage
employees with information about criminal antitrust activity, such
as price fixing, to report that information by offering meaningful
protection to those who blow the whistle rather than leaving them
vulnerable to reprisals." Grassley added, "Too often
whistleblowers who expose waste, fraud and abuse are treated like
second class citizens. . . [The Act is] a natural extension to
similar legislation Senator Leahy and I got included in the
Sarbanes-Oxley reform, and it can be a real deterrent to those who
are thinking about committing fraud in the future."
It is essential for companies to understand and monitor this
bill. If passed, the law would further encourage employees to come
forward to authorities with information about criminal antitrust
activity. Such encouragement and protection for employees who were
not involved in the illegal conduct seems fair and balanced. The
central flaw of the bill, however, is that even a whistleblower who
is a leader, major participant or prime mover in a scheme that is
directly and significantly contrary to a company's policies,
practices, and interests stands to gain significant protection from
their employers. The language of the bill explicitly excludes only
those employees who both "planned and initiated" the
scheme. If the bill is ultimately enacted in its present form,
companies should prepare for the increased likelihood that
whistleblowers who are true corporate "bad actors" will
then be free to disclose their schemes with a likely immunity grant
from the government and statutory protection from any form of
reasonable discipline by their employer. Companies, therefore,
should not only take steps to strengthen their antitrust compliance
programs to detect illegal activity, but should also be aware that
the extreme breadth and depth of this bill's protections can
actually encourage an unscrupulous employee to risk illegal action
to the company's detriment precisely because of these same
protections.
Footnotes
1 Criminal Antitrust Anti-Retaliation Act of 2013, S. 42,
112th Cong. (2013), available at: http://www.gpo.gov/fdsys/pkg/BILLS-113s42is/pdf/BILLS-113s42is.pdf.
The Senators previously introduced the legislation in July 2012,
but the bill died in committee without a vote.
2 U.S. Gov't Accountability Office, GAO 11-619,
Report to Congressional Committees: Criminal Cartel Enforcement:
Stakeholder Views On Impact of 2004 Antitrust Reform are Mixed, but
Support Whistleblower Protection, (2011), available at: http://www.gao.gov/assets/330/321794.pdf.
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