Just over two months ago, the United States Department of Justice made waves when a memorandum from Deputy Attorney General Sally Quillian Yates (the “Yates Memo”) announced an increased focus on individual accountability to combat corporate misconduct. The Yates Memo explains DOJ’s view that individual accountability is important because it deters future illegal activity, incentivizes changes in corporate behavior, ensures the proper parties are held responsible for their actions, and promotes the public’s confidence in the justice system.
On November 16, 2015, Yates – speaking at the ABA Money Laundering Enforcement Conference – offered additional insight on the DOJ’s policy to “ensure that individual accountability is at the heart of our corporate enforcement strategy.” Most notably, Yates announced revisions to the United States Attorney’s Manual to emphasize the primacy of holding individual wrongdoers accountable in corporate criminal cases.
What is the impact of these developments on antitrust cases?
• More focus on individuals: The Antitrust Division has had, for quite some time, a stated policy of pursuing individuals (in addition to corporations) for antitrust violations. In that sense the Yates Memo is unlikely to result in broad changes in antitrust enforcement. Still, there remains the possibility that the DOJ’s focus on individual accountability may nonetheless encourage the Antitrust Division to increase its efforts to hold individuals accountable for antitrust violations.
• Leniency: As many of you know, companies that participate in the Antitrust Division’s Corporate Leniency Program frequently also obtain leniency for individuals who would otherwise be held accountable. Although the Yates Memo states that “the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation,” it also recognizes the Leniency Program as an exception to that general rule. Accordingly, the new policy is not expected to have a significant impact on the treatment of individuals within the Leniency Program. However, the policies reflected in the Yates Memo and resulting changes to United States Attorney’s Manual will have a significant impact on companies that have not submitted leniency applications.
• Requirements for cooperation: Just last week, Yates stressed that “if a company wants credit for cooperating – any credit at all – it must provide all non-privileged information about individual wrongdoing.” As Yates explained, the policy “that corporate cooperation includes giving all non-privileged information about the conduct of individuals – is nothing new. . . What is new is the consequence of not doing it.” In the past, companies could get some credit for cooperation even without making full disclosures. The new policy requires “providing complete information about individuals’ involvement in wrongdoing” and states that doing so “is a threshold hurdle that must be crossed” before DOJ will consider any cooperation credit. Moreover, the policy requires not only that the company report the facts of which its leadership is already aware, but also that the company conduct an investigation “to determine the facts.” In most cases, companies hoping to take advantage of the Antitrust Division’s Leniency Program already take these steps. However, the new policies make providing complete information to the DOJ mandatory in every case in which the company hopes to get any credit at all for cooperating.
• Privilege: Yates also provided additional guidance on what the DOJ means when it references non-privileged information. Noting that “legal advice is privileged,” but that “[f]acts are not,” Yates explained that “to earn cooperation credit, the corporation does need to produce all relevant facts – including the facts learned through” interviews conducted as part of an internal investigation.
• Civil cases: The changes to the United States Attorney’s Manual also include “an entirely new section on enforcing claims against individuals in corporate matters.” The new civil section directs DOJ’s civil attorneys “to follow the same principles” in determining whether to pursue individual misconduct.
The complete impact of the new policy on antitrust cases is not yet clear. Indeed, Yates acknowledged speculation “that the new policy may mean that fewer companies cooperate with the government because of some perception that the new standard is too difficult to meet.” While Yates was “not convinced” that would be the result, she also stated that “if fewer companies cooperate and our corporate settlements are reduced, we’re okay with that.”
Ultimately – and regardless of whether more companies ultimately choose to cooperate – one key takeaway is that companies that wish to maintain cooperation as a viable option should consider a prompt internal investigation upon learning of antitrust wrongdoing. Such an investigation is essentially a prerequisite to cooperation under the new policy. (In addition, as we have previously noted, early detection of wrongdoing and prompt investigations can facilitate participation in the Antitrust Division’s Leniency Program, under which complete leniency can be obtained only for the first company to report a particular cartel.)
