For many years, the DOJ Antitrust Division believed its best tool for deterring and detecting antitrust violations, such as big rigging, price fixing, and market allocation, was to grant leniency to those companies (or individuals), who self-reported criminal conduct. Under the Division’s Leniency Program, a qualified leniency applicant (a company or individual who was the first to bring the criminal violation to the Division’s attention) could avoid charges and large fines altogether by cooperating and paying restitution. Additionally, the applicant would benefit by the de-trebling of damages from any resulting civil antitrust lawsuit.
During this same period, the Division broke ranks from existing DOJ policy, which credited compliance programs throughout the investigation and prosecution stages, by only crediting compliance programs at the time of sentencing. This policy distinction served to incentivize bad actors to rely solely on the Division’s Leniency Program to mitigate criminal exposure at the expense of having an effective compliance program. In fact, a company does not need to have a compliance program in place to make out well under the Leniency Program, although companies which did not qualify under the Leniency Program would only receive compliance credit at sentencing, much to their detriment.
Does my company benefit from implementing a compliance program?
However, in July 2019, the Division reversed field by announcing that it would credit robust compliance programs at the time of the offense, allowing companies to obtain a Deferred Prosecution Agreement (DPA), an agreement by the government to dismiss charges if the defendant satisfies certain conditions of the DPA, and receive a significantly reduced criminal fine, while still paying restitution. By reverting back to DOJ’s existing compliance policy, the Division acknowledged that a well-tailored and well-intended compliance program served the purpose of both deterrence and detection. This new approach recognizes that companies should not pay a high penalty for rogue employees who refuse to follow comprehensive compliance programs that are in place at the time of the violation. Notably, a corporation can still benefit from establishing a compliance program after the time of offense by obtaining credit from the Division for taking remediation efforts.
So which is the better route to take, leniency or compliance?
Through the leadership of Jim Kurosad, Senior Counsel at Dysart Willis Houchin & Hubbard and a 30 year veteran of the FBI, Antitrust Division, and U.S. Attorney’s Office, clients are counseled to use a belt and suspenders approach by both establishing an effective compliance program and self-reporting under the Division’s Leniency Program. Having a robust compliance program will help deter employees from committing antitrust violations, uncover existing violations, and mitigate damages after self-reporting. If the company (or individual) is lucky enough to be first in line at the Division’s doorstep, it may qualify under the Leniency Program, where business and personal risks are greatly reduced. Either way, this comprehensive approach will maximize client options under existing DOJ policy.
Contact our attorneys to discuss best practices
If you are a corporate executive and have questions about establishing a compliance program or believe that a wellness check by an experienced antitrust attorney could be overdue, contact Dysart Willis Houchin & Hubbard.