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Regulatory: Antitrust Division modifies “carve out” policy for corporate plea agreements

Updated policy could help prevent more employees from reputational harm

There are significant differences among the various divisions of the Department of Justice (DOJ) in how they deal with corporations on criminal or potentially criminal matters, including the way they treat voluntary disclosures, their willingness to enter into non-prosecution or deferred prosecution agreements, and their policies and practices in entering into plea agreements. To some extent, these disparities are not surprising given the differences in the nature of the criminal activities that the various divisions handle. This is certainly true of the Antitrust Division, whose Corporate Leniency Policy, promising amnesty under predefined conditions to the first company to report criminal antitrust activity, has no counterpart in any other component of the DOJ. However, other disparities do not appear to be justified. One of these, the Antitrust Division’s “carve out” policy, has finally been modified to bring it in line with the policies of the rest of the Justice Department.

Corporate plea agreements entered into with the Antitrust Division often contain a non-prosecution provision which protects the company’s employees from criminal liability related to the antitrust activity at issue. However, the Antitrust Division may also exclude or “carve out” certain individuals from this protective provision, based on its belief that these individuals may be criminally culpable and could be targeted in the future for their particular involvement. Previously, the names of all the individuals being carved out from the company’s plea agreement protections were listed in the publicly available version of the document. This oft-criticized practice was contrary to the stated position of every other unit within the DOJ, all of which follow policies against the public naming of uncharged third parties.

Contributing Author

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Ronald A. Sarachan

Ronald A. Sarachan is a partner in Drinker Biddle & Reath's Commercial Litigation Practice Group and co-chair of the White Collar/Internal Investigations Team. He focuses...

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Contributing Author

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Nicholas S. Feltham

Nicholas S. Feltham is an associate in Drinker Biddle & Reath's Commercial Litigation Practice Group, and is a member of the firm’s e-discovery team. Mr....

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