On July 22cd, the Senate passed the Criminal Antitrust Anti-Retaliation Act of 2015. The bill now goes to the House for consideration. If signed into law the Act will create for the first time whistleblower protections for employees who report antitrust violations. Senator Patrick Leahy and Senator Charles Grassley introduced the bipartisan bill, which provides the following protections and remedies:
Protects employees who report violations of antitrust laws to internally or to the Federal Government from retaliation.
Allows an employee to file a whistleblower retaliation claim with the Department of Labor and also grants de novo review and a jury trial in Federal Court.
Provides employees who suffer retaliation to receive reinstatement, back pay, special damages, attorneys fees and costs.
The full text of the Act is available here.
I did not initially write about the bill for two reasons. From what I’ve read, there is a less than 50% chance that the bill will pass the House. It is the same bill that has gone to the House to die in the past. If the Act does pass and goes on to the President, I would assume it will be signed.
The other reason I did not write about the Act is because it seems like a pretty ineffective way to encourage whistle blowers to come forward. There is no potential monetary reward for taking the enormous risk of coming forward an exposing a price-fixing or bid rigging crime. There is simply a statute that offers some protection against retaliation if you do come forward.
Still, the passage in the Senate of the Act has gotten me thinking (a monumental accomplishment in itself) about not only should the Anti-Retaliation Act be enacted, but should there also be a whistleblower reward, as there is for SEC violations? As part of the Dodd-Frank reform the SEC established the Office of the Whistleblower. I think simply having such an office indicates a serious desire to encourage whistleblowers. But, on a more material level, the Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected. The Whistleblower Office has said “Assistance and information from a whistleblower who knows of possible securities law violations can be among the most powerful weapons in the law enforcement arsenal of the Securities and Exchange Commission.” And Mary Jo White, SEC Chairwoman recently said: “The program, while clearly still developing, has proven to be a game changer.”
Would an “Office of the Whistleblower” be good for the Antitrust Division? (There is still vacant office space in Philadelphia, Atlanta, Dallas and Cleveland :-). The Antitrust Division clearly has not pushed for this tool. One concern expressed by the Antitrust Division while I still worked there was that the provision of a whistleblower bounty would undermine the credibility of a witness. (But, more so than amnesty for an entire organization, or immunity for culpable high level executives?). A whistleblower incentive could also inundate the Division with false leads that would consume valuable resources. (I recall one time when I was Chief in Philadelphia, I received a complaint that the gas companies were fixing prices because everyone went up a nickel on the same day! Well, they did—as a new Pennsylvania tax became effective that day.) The Division has the experience to size up an irate customer complaining about high prices from an ex-employee who has emails/notes from the cartel meetings he attended. A last concern may be “How will this affect the leniency program?” The Antitrust Division is as protective of the leniency program as a Momma Bear is of her cubs. Even the thought of a parallel track for getting incriminating cartel information to the Division—and getting a nice reward—raises alarm bells in the Division.
Would a whistleblower provision undermine the leniency program or overall be a negative in other ways? Who would likely take advantage of this provision? Anyone? One reality that weighs on my mind is that no one should come forward as an antitrust whistleblower without having an attorney of his/her own because a whistleblower may have some personal liability. But, who could afford to hire an experienced antitrust lawyer “to do the right thing” if there is no possibility of those expenses being recouped? There are many issues to consider, but given the apparent great success of the SEC whistleblower provision, these questions deserve serious thought. I would welcome discussion with anyone who has some views or insights on the question. If you would like to chat about this, please feel free to contact me at Robert.firstname.lastname@example.org.
Thanks for reading.