Antitrust Division Will No Longer “Carve-Out” from Corporate Plea Agreements Employees Not Believed to Be Culpable: Baer

This posting was written by John W. Arden.

On April 12, the Department of Justice Antitrust Division announced a change in the Division’s "carve-out" practice regarding corporate plea agreements, stating an intent to continue to exclude (or "carve out") from plea agreements employees believed to be culpable, but not to carve out employees for reasons unrelated to culpability, such as refusal to cooperate with an investigation.

"Going forward, we are making certain changes to the Antitrust Division’s approach to corporate plea agreements," said Bill Baer, Assistant Attorney General in charge of the Antitrust Division. "In the past, the division’s corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division’s investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located."

"As part of a thorough review of the division’s approach to corporate dispositions, we have decided to implement two changes," the antitrust chief continued.

The first change is that the division "will continue to carve out employees who we have a reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability."

The second change is that the division "will not include the names of carved-out employees in the plea agreement itself." Those names will be listed in an appendix, which the Antitrust Division will ask to be filed under seal. "Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers," Baer said.

These policy changes were highly anticipated by the antitrust bar and are consistent with the practice of other divisions of the U.S. Department of Justice.