The U.S. Department of Justice Antitrust Division (DOJ) announced two significant changes to its
practice regarding corporate plea agreements for individuals
charged with antitrust violations, such as price fixing and bid
rigging. First, DOJ will no longer exclude (or "carve
out") employees from non-prosecution agreements for reasons
unrelated to culpability. Second, DOJ will no longer include
the names of carved-out employees in the publicly filed plea
agreement itself. Both are welcome changes that provide
uncharged individuals with protection against the public stigma of
potentially being perceived the subject of a criminal
In the past, DOJ plea agreements included a provision offering non-prosecution protection to those company employees who cooperated with the investigation and whose conduct did not warrant prosecution. However, DOJ carved out from the provision offering non-prosecution those employees who were believed to be culpable. Additionally, in certain circumstances DOJ also carved out (i) employees who refused to cooperate with the investigation, (ii) employees against whom DOJ was still developing evidence, and (iii) employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the publicly-filed corporate plea agreements.
After a thorough review of its practices, DOJ decided to implement two changes. Employees who DOJ has reason to believe were involved in criminal wrongdoing and who are potential targets of the investigation will continue to be carved out. However, individuals will no longer be carved out for reasons unrelated to culpability. Second, DOJ will not include the names of carved-out employees in the plea agreement itself. Instead, the agency will include those names in an appendix and ask the court for leave to file the appendix under seal.
Commentators had been calling for DOJ
to make these changes for some time. DOJ has said all plea
agreements should be consistent with the Principles of Federal
Prosecution that recognize that "[i]n all public filings and
proceedings, federal prosecutors should remain sensitive to the
privacy and reputation interests of uncharged third-parties...and
should strive to avoid unnecessary public references to wrongdoing
by uncharged third-parties." The practice of publicly
disclosing the names of individual carve-outs conflicted with those
principles. And DOJ's stated interests underlying the old
policy – the public's First Amendment right of access to
filed plea agreements, the need for contractual clarity for all
employees of the corporate defendant, and the right of victims to
access plea agreements under the Crime Victims' Rights Act of
2004 – did not outweigh the harms caused by the public
disclosure of a carve-out's identity, including potential
damage to personal reputation, the public stigma of being perceived
a criminal, and the resultant significant negative impact on
relationships with colleagues and others within the
profession. The prior policy lumped together those whom DOJ
thought may be culpable with those who were simply uncooperative
with the investigation or whom DOJ could not locate.
Publishing the list prejudiced the non-culpable and uncooperative
employees, who received the public stigma of potentially being
labeled a criminal.
DOJ acknowledged these criticisms in
its recent announcement: "Absent some significant
justification, it is ordinarily not appropriate to publicly
identify uncharged third-party wrongdoers." However, DOJ
also made clear that it will continue to carve out any employees
whose conduct may warrant prosecution, demand the full cooperation
of any individuals who seek the benefit of non-prosecution
protection, and revoke the protection for anyone who does not fully
and truthfully cooperate with investigations. Thus,
individuals cannot be uncooperative with DOJ investigations and
expect to escape carve-out treatment in all instances.
Assistant Attorney General Bill Baer issued a statement regarding the changes, noting that the "Antitrust Division's efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing." Baer emphasized that DOJ is committed to building on these past successes through the continued use of corporate plea agreements.
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