Today, the Justice Department’s Antitrust Division and Department of Labor, Occupational Safety and Health Administration (OSHA), jointly affirmed that corporate non-disclosure agreements (NDAs) that deter individuals from reporting antitrust crimes undermine the goals of whistleblower protection laws, including the Criminal Antitrust Anti-Retaliation Act of 2019 (CAARA). CAARA prohibits employers from discharging or otherwise retaliating against a worker for (1) reporting potential criminal antitrust violations and related crimes to their employer or the federal government or (2) assisting a federal government investigation or proceeding.
NDAs that undermine CAARA or otherwise interfere with employees’ freedom to report potential crime will cost the employer when the Antitrust Division makes its charging decisions and sentencing recommendations. Companies should also be aware that using NDAs to obstruct or impede an investigation may also constitute separate federal criminal violations. Any company that so interferes with its employees’ cooperation would jeopardize its ability to satisfy its obligations under the Antitrust Division’s leniency policy , which requires an applicant to “use its best efforts to secure the timely, truthful, continuing, and complete cooperation of all current and former employees.” And the Antitrust Division’s Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations guidelines consider a company’s policies around NDA and anti-retaliation training in assessing the effectiveness of the company’s compliance program.
“Members of the public are often best positioned to detect and blow the whistle on antitrust crimes,” said Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “The Antitrust Division values this information and works to ensure that individuals are free to report misconduct without fear of retaliation or retribution.”
“By working jointly with partner agencies to break down barriers to employee reporting, OSHA is committed to strengthening our enforcement of whistleblower laws and protecting workers’ voices,” said Deputy Assistant Secretary for Occupational Safety and Health Jim Frederick. “This collaboration fosters a culture of accountability and upholds the integrity of worker rights.”
What Companies Should Know
Whistleblower Protections for Reporting Antitrust Crimes
Antitrust crimes hurt consumers, workers, and taxpayers – and threaten our free-market economy and democratic institutions. For over 130 years, criminal prosecutors have used antitrust laws as a charter of economic freedom to protect and promote competition.
Members of the public are often best positioned to detect and blow the whistle on antitrust crimes. Leads from the public about potentially illegal conduct enable the Antitrust Division and its law enforcement partners to uncover antitrust cartels and monopolization schemes, prosecute those crimes and protect competition. The Antitrust Division values this information and works to ensure that members of the public are free to report misconduct without fear of retaliation or retribution. The Antitrust Division protects to the fullest extent of the law the identity of those who report antitrust violations.
CAARA protects company employees, contractors, subcontractors or agents who report certain criminal antitrust violations. CAARA prohibits employers from discharging or otherwise retaliating against a worker for (1) reporting potential criminal antitrust violations and related crimes to their employer or the federal government or (2) assisting a federal government investigation or proceeding. Therefore, CAARA helps to incentivize the reporting of antitrust crimes and supports the Antitrust Division’s criminal enforcement program.
NDAs and Contractual Restrictions on Reporting May Conflict with Antitrust Enforcement and CAARA
Individuals who seek to report antitrust violations must not be deterred or prevented from coming forward for fear of adverse employment consequences.
The Antitrust Division’s work prosecuting antitrust crimes is compromised when NDAs deter individuals from providing law enforcers with relevant information on wrongdoing. When individuals believe that a corporate NDA may prevent them from reporting illegal conduct to enforcers, crimes go undetected and competition suffers. For example, some NDAs are worded so broadly as to suggest that people who report potential crimes or cooperate with law enforcement could face lawsuits and adverse employment consequences as severe as termination. This fear of retribution leads to less reporting of illegal activity and less vigorous antitrust enforcement.
NDAs that discourage individuals from reporting wrongdoing or cooperating with an antitrust investigation also undermine CAARA’s goal of protecting whistleblowers. Even the mere implication that an NDA would bar employees from reporting illegal conduct or assisting an investigation or proceeding clashes with the basic principles behind CAARA that encourage self-reporting and disclosure of wrongdoing to the government.
NDAs that Deter Reporting Will Cost Companies at Charging and Sentencing
CAARA encourages individuals to provide tips to law enforcement and cooperate in antitrust investigations, incentivizes companies to promote compliance and complements leniency and cooperation credit policies. For these reasons, NDAs that undermine CAARA or otherwise interfere with employees’ freedom to report potential crime will cost the employer when the Antitrust Division makes its charging decisions and its sentencing recommendations. Companies should also be aware that using NDAs in efforts to obstruct or impede an investigation may also constitute separate federal criminal violations. And of course, a company that interferes with its employees’ cooperation would jeopardize its ability to fulfill its obligations under the Antitrust Division’s leniency policy , which requires an applicant to “use its best efforts to secure the timely, truthful, continuing, and complete cooperation of all current and former employees.”
The Antitrust Division’s Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations guidelines, which prosecutors use to assess the effectiveness of compliance programs when making charging decisions and sentencing recommendations, make clear that the sufficiency and efficacy of a compliance program depends on the existence of “reporting mechanisms that employees can use to report potential antitrust violations anonymously or confidentially and without fear of retaliation.” The questions prosecutors ask in evaluating a compliance program include:
- Whether a company has an anti-retaliation policy;
- Whether it trains employees, managers and supervisors on the provisions of CAARA;
- Whether the company’s use of NDAs is consistent with ensuring that employees can report antitrust violations without fear of retaliation;
- Whether NDAs are used in a way that deters whistleblowers or violates CAARA; and
- Whether NDAs and other employee policies make clear that employees can report antitrust violations, including to government authorities.
Companies that fail to address retaliation, CAARA and NDAs in their policies and compliance structure risk losing out on the benefits associated with maintaining an effective compliance program when the Antitrust Division is making charging decisions and sentencing recommendations.