Senate Passes Another Criminal Antitrust Anti-Retaliation Act July 30, 2015

Last Wednesday, the Senate passed with unanimous consent the Criminal Antitrust Anti-Retaliation Act of 2015 (“CAARA”) after minor tweaks to two definitions. CAARA provides anti-retaliation protection to whistleblowers who give information to their employer or the federal government concerning criminal violations of antitrust laws. The bill, sponsored by Senators Chuck Grassley and Patrick Leahy, had been introduced twice before—once in 2012 and again in 2013. On its third attempt, CAARA sailed through the Senate Judiciary Committee and the full chamber and is poised for review in the House. Quick passage would reflect Congress’ emphasis on providing greater protection to whistleblowers.

The bill was edited from prior iterations to include a definition for “Federal Government” and to protect only lawful acts by covered individuals. CAARA still covers a broad range of conduct, claimants, and actors. CAARA prohibits an employer from retaliating against a covered individual who provides information relating to “any violation of, or any act or omission the covered individual reasonably believes to be a violation of, the antitrust laws.” It also protects a covered individual in sharing information regarding conduct that he or she, again, reasonably believes is a violation of “another criminal law committed in conjunction with a potential violation of the antitrust laws or in conjunction with an investigation by the Department of Justice of a potential violation of the antitrust laws.” “Covered individual” is defined as “an employee, contractor, subcontractor, or agent of an employer;” an “employer” is a “person, or any officer, employee, contractor, subcontractor or agent of such person.” Moreover, not only does CAARA protect an individual who provides information to his or her employer, but also one who provides information to the federal government, a new defined term that includes “any Federal regulatory or law enforcement agency,” as well as any member of Congress. To date, however, there is no incentive program associated with CAARA as there is under Dodd-Frank.

A person covered under the Act who believes he or she has been retaliated against must first file a complaint with the Secretary of Labor within 180 days of the alleged violation. If the Secretary does not make a final decision within 180 days of the filing of the complaint, the complainant may then seek redress in an appropriate U.S. district court. Potential remedies include reinstatement, back pay with interest, costs and attorneys’ fees.

It will be interesting to see to what extent CAARA encourages potential antitrust tipsters to come forward. For comparison, under the Dodd-Frank Whistleblower Program, the Securities and Exchange Commission received more than 3,000 tips in each of the first three full years in existence (or approximately nine tips per day). While it is unlikely that the Department of Justice will see a similar volume of tips for potential antitrust violations, CAARA’s protections could lead to an increase in whistleblower reports (and, perhaps, at least retaliation claims). That said, the Department of Justice’s criminal antitrust enforcement efforts—without whistleblower protections—have led to at least $1 billion in criminal fines in each of the past three years. See The DOJ’s Criminal Enforcement Fine and Jail Charts. The question is whether CAARA will enhance those enforcement efforts. And because CAARA does not require an employee to first make an internal report to company leadership, in many cases it is likely that a company will first learn about a potential antitrust violation after receiving a phone call or subpoena from the Department of Justice.

Drinker Biddle will continue to monitor CAARA and its potential impact on government investigations of potential antitrust violations if the legislation is enacted.  If you have any questions or concerns, please do not hesitate to contact one of the authors or your usual Drinker Biddle contact.