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.
3 See Press Release, Leahy, Grassley Introduce Legislation to Protect Whistleblowers in Criminal Antitrust Cases (January 23, 2013), available at: http://www.leahy.senate.gov/press/leahy-grassley-introduce-legislation-to-protect-whistleblowers.
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