Antitrust lawyers are applauding a new Justice Department policy that's likely to benefit uncooperative employees of corporations under investigation for price fixing and other cartel conduct.
Antitrust Division head William Baer today announced changes to the division's so-called "carve-out practice" in corporate plea agreements that will protect the privacy of those suspected but not yet charged with wrongdoing, and spare uncooperative employees from being stigmatized as a potential criminals.
In the past, the Antitrust Division’s corporate plea agreements have sometimes included non-prosecution deals for employees who cooperate and whose conduct does not warrant prosecution.
But the division excluded—or “carved out”—employees who were potentially guilty of wrongdoing. It also excluded a much broader group of employees who refused to cooperate, as well as those who couldn’t be located and those that division was still developing evidence against.
The issue, Baer explained in a statement, is that the “names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.”
The new policy implements two changes. First, Baer said, the division will “no longer carve out employees for reasons unrelated to culpability.” In addition, the division will no longer include the names of carved-out employees in plea agreements.
“Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal,” he said. “Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.”
David Wales, who heads Jones Day’s antitrust practice, called the policy change “a good one.” The change, he said, is “more fair and more in line with our constitutional protections, like innocent until proven guilty.”
The old system “lumped together those that the DOJ thought may be culpable with those that were simply uncooperative, so that when the list was published, the uncooperative were somewhat prejudiced,” Wales said. “The new policy prevents those that are simply uncooperative from being stuck with the public stigma of potentially being a criminal. The new policy also prevents those who are even suspected of being culpable from facing the same public stigma, especially when the DOJ may not ultimately charge them.”
King & Spalding antitrust partner Wendy Waszmer, who previously served as the assistant chief of the division’s New York field office, said the new policy “makes a lot of sense from the perspective of continued vigorous enforcement and being sensitive to the needs of individuals. It’s an effective balance.”
Added McDermott Will & Emery antitrust partner Alison Smith, "The change in policy is a great credit to Bill Baer, the new [assistant attorney general] for the Antitrust Division, and reflects that a fair hand is at the wheel of the division."