Tuesday, April 30, 2013
At the ABA Antirust Spring Meeting in Washington DC, Assistant Attorney General for the Antitrust Division William Baer announced a significant change in the Division’s practice of carving out of individuals from the non-prosecution protection offered in corporate plea agreements. Depending on circumstances, the Division may be willing to enter into a plea agreement with a corporation and provide non-prosecution to some, but not all, of the corporation’s executives. The Division may reserve for prosecution (carve-out) some executives it thinks are culpable, or others it whose conduct doesn’t warrant prosecution, but the individual(s) declines to cooperate. The most contentious part of the carve-out practice was that the Division would name these individuals in a public plea agreement. This could smear an executive’s reputation by signaling that they were involved in criminal conduct, but provide no way for them to clear their name. Courts upheld the practice as legal, but one court found the Division's policy "unappealing," "offensive" and a “perp walk.”
The defense bar had long lobbied for a change in this policy, especially demanding that the names of carved-out individuals not be made public. See, e.g., Victor, Farber and Duke, “The Policy Case for Eliminating The Public Identification of Carve-Outs In Antitrust Plea Agreements.” Baer, who has worked on the defense side himself, agreed. He issued a press release stating: “As part of a thorough review of the Division’s approach to corporate dispositions, we have decided to implement two changes. The Division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigations. However, we will no longer carve out employees for reasons unrelated to culpability.” And, for those carved out “the Division will not include the names of carved-out employees in the plea agreement itself. Those names will be listed in an appendix, and we will ask the court for leave to file the appendix under seal.” See Statement of Assistant Attorney General Bill Baer on Changes to Antitrust Division's Carve-Out Practice Regarding Corporate Plea Agreements, April 12, 2013.