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DOJ’s Antitrust Division Reverses Policy on Individual Carve-Outs in Company Plea Agreements

[Editor's Note:  The following is a Wilson Sonsini Goodrich & Rosati Client Alert.]

On Friday, April 12, 2013, the Antitrust Division of the United States Department of Justice announced a reversal in policy relating to its negotiations with companies that plead guilty of criminal antitrust violations.  The new policy significantly affects how the Antitrust Division will approach the plea negotiation process and enforce the criminal antitrust laws.

First, the Antitrust Division announced that it would no longer publicly disclose the names of individuals excluded (or “carved out”) from the non-prosecution provision of company plea agreements.  This provision protects the company and its employees from further prosecution under the antitrust laws for the conduct at issue (a core benefit for companies entering into the plea), but some employees typically are carved out from this protection.  Prior to the announcement last week, the Antitrust Division had a long-standing practice of disclosing the names of these carve-out employees in the plea agreement, a practice that some have called a “perp walk.”  The division now has put an end to this practice, recognizing that “[a]bsent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.”

Second, the Antitrust Division announced that it no longer would carve out individuals from pleas merely for not cooperating in its investigation.  Instead, the division will carve out only those individuals who are “potential targets” of the investigation (i.e., only those whom the division has reason to believe were engaged in the criminal conduct at issue and targets for potential prosecution).  Prior to the announcement, the Antitrust Division had a long-standing practice of carving out from the non-prosecution protection of a plea agreement two categories of individuals:  (1) those the division has reason to believe were involved in criminal wrongdoing (i.e., potential targets) and (2) those who are uncooperative in its investigation or are difficult to find or contact.  Under the new policy, the division will limit the carve-outs to the first category of individuals.  The Assistant Attorney General of the Antitrust Division, Bill Baer, elaborated publicly, stating:  ”I reached the conclusion that . . . focusing on the group of people who are potentially targets of the investigation, potentially liable, [and] can be charged [] was a better way of defining our carve-out groups.”

To read the rest of the WSGR Article, click here.

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