The Antitrust Division of the Department of Justice is considering new guidance from Deputy Attorney General Sally Quillian Yates directing Department attorneys to focus on individual culpability in corporate investigations, including in the civil context.1 The Department also recently hired an expert to evaluate company compliance programs in criminal matters, showing “just how seriously” the Department takes compliance.2 In parallel, the Antitrust Division recently has shown signs of a potential policy shift in favor of considering company compliance programs at the sentencing phase. These developments signal a heightened risk of antitrust liability for corporate individuals and serve as a stark reminder about the importance of an effective antitrust compliance program.
The Antitrust Division may be increasing its focus on individuals and perhaps seeking personal liability in the civil context. Assistant Attorney General Bill Baer said the Antitrust Division was considering September guidance from the Justice Department regarding individual accountability for corporate misconduct in both criminal and civil investigations.3 The memorandum4 describes several Department directives, including focusing investigations specifically on culpable individuals, increasing communication between civil and criminal lawyers to maximize resolution options, and avoiding resolutions of corporate culpability that preempt liability for individuals.5 The memorandum directs Department attorneys to “proactively investigat[e] individuals at every step of the [investigation] process.”6 In addition, the memorandum emphasizes that investigating individual conduct “is the most efficient and effective way to determine the facts and extent of any corporate misconduct,” and furthers the Department’s goal of levying civil or criminal charges against culpable individuals.7 Just last week, the Division indicted three German former executives of Espar Inc.,8 ostensibly pursuant to a more aggressive policy to pursue culpable individuals.9
In parallel, the Department has increased its focus on company compliance efforts. Last summer, the Justice Department announced that its Fraud Section would hire compliance counsel to aid in evaluating companies’ compliance programs during criminal investigations. On November 2, 2015, the Department announced its hire of Hui Chen10 as the Fraud Section’s compliance expert. Andrew Weissman, Chief of the Fraud Section, stated that the compliance expert would help “differentiate the companies that get it and are trying to implement a good compliance program from the people who have a near-paper program.”11 The compliance expert is meant to benchmark various companies in a variety of industries to set realistic expectations for evaluation.12 The Criminal Division routinely considers compliance efforts in charging and sentencing decisions. Weissman called the move to bring on compliance counsel an “effort to…[commit] greater resources and expertise” to evaluating company compliance programs.13
A possible shift in the Antitrust Division’s willingness to consider company compliance efforts might also be underway, making antitrust compliance programs even more relevant to minimizing company and individual liability exposure. The Antitrust Division, unlike the Criminal Division, historically has not provided sentencing credit for compliance programs.14 Among other reasons, officials have explained that the Antitrust Division’s Leniency Program provides for credit indirectly – i.e., an effective compliance program would theoretically allow a company to quickly detect a violation, report it to the Division, and petition for leniency.15 Recent developments, however, suggest a possible change in the Antitrust Division’s position in favor of recognizing antitrust compliance programs, at least at the sentencing phase. In a speech last year, Deputy Assistant Attorney General Brent Snyder stated that the Antitrust Division was considering ways to credit companies that “proactively adopt or strengthen compliance programs after coming under investigation.”16 Then in May of this year, for the first time, the Antitrust Division credited improvements to a company’s compliance and remediation program when determining the company’s sentence.17 Later in June, the Division granted sentencing credit to KYB Corp. in connection with price fixing allegations because of the company’s post-conviction compliance efforts. Snyder stated that the Antitrust Division will continue to credit forward-looking compliance efforts at the sentencing phase.18
Companies and executives should take note of the Antitrust Division’s policy shift regarding antitrust compliance programs and the Department’s recent directive to pursue culpable individuals. Not only can an effective antitrust compliance program safeguard a company against potential violations, but it can also increase a company’s chances of benefiting under the Antitrust Division’s Leniency Program through quick detection and early reporting of misconduct. The Division’s recent willingness to credit companies for compliance efforts makes a firm’s antitrust compliance program even more important. Additionally, an effective antitrust compliance program can protect company individuals from becoming targets of a government investigation and subject to penalties. This is especially critical, given the Department’s directive to increase its pursuit of culpable individuals.