Labor & Employment Law Daily Wrap Up, AGENCY NEWS—Justice Department and OSHA warn against NDAs, can hinder antitrust reporting, (Jan 17, 2025)

By WK Editorial Staff

The two agencies issued a statement critical of NDAs that deter the reporting of antitrust crimes.

The Justice Department and Department of Labor, Occupational Safety and Health Administration (OSHA), jointly affirmed that corporate non-disclosure agreements (NDAs) that deter individuals from reporting antitrust crimes undermine the goals of whistleblower protection laws, including the Criminal Antitrust Anti-Retaliation Act of 2019 (CAARA). The announcement underscores the importance of whistleblower protections under CAARA, which safeguards employees who report potential antitrust crimes from retaliation. Specifically, CAARA prohibits employers from discharging or otherwise retaliating against a worker for (1) reporting potential criminal antitrust violations and related crimes to their employer or the federal government or (2) assisting a federal government investigation or proceeding.

The Justice Department and OSHA have made it clear that NDAs which discourage or prevent employees from reporting antitrust violations or assisting in federal investigations not only undermine CAARA but also risk significant consequences for employers. Such NDAs can affect the Antitrust Division's decisions on charging and sentencing, and may even lead to separate federal criminal charges if they are found to obstruct investigations. The joint statement highlights the critical role of whistleblowers in antitrust enforcement and the need for companies to align their NDAs and compliance programs with federal laws protecting these individuals.

Whistleblower protections and antitrust enforcement. Antitrust violations, which can harm consumers, workers, and the economy, have been a focus of U.S. law enforcement for over a century. The Antitrust Division relies heavily on information from the public to detect and prosecute these crimes. CAARA enhances this enforcement by protecting employees, contractors, and agents from retaliation when they report potential antitrust violations to their employer or the government, or when they assist in investigations.

The Justice Department emphasizes that the public is often best positioned to identify and report antitrust crimes. Therefore, ensuring that individuals can report misconduct without fear of retaliation is crucial for effective antitrust enforcement. The Antitrust Division values and protects the identity of those who report violations to the fullest extent of the law.

The impact of restrictive NDAs. The use of NDAs that are overly broad or suggest that employees could face negative consequences for reporting misconduct poses a significant challenge to antitrust enforcement. Such agreements can deter individuals from coming forward with critical information, allowing antitrust crimes to go undetected and unchecked. This, in turn, undermines competition and the free-market economy.

The Antitrust Division warns that NDAs which imply or explicitly state that reporting violations could lead to lawsuits or termination are in direct conflict with CAARA's objectives. These agreements not only discourage whistleblowers but also weaken the overall effectiveness of antitrust enforcement efforts.

Consequences for companies. Companies that utilize NDAs to hinder reporting of antitrust violations face serious repercussions. The Antitrust Division's leniency policy, which encourages companies to cooperate fully with investigations, may be jeopardized if a company is found to interfere with employee cooperation. This policy requires companies to make every effort to secure honest and complete cooperation from both current and former employees.

Moreover, the Antitrust Division's Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations guidelines take into account how NDAs and anti-retaliation policies are implemented. Prosecutors assess whether companies have mechanisms in place for employees to report potential violations anonymously or confidentially, without fear of retaliation. They also examine whether companies have anti-retaliation policies, provide training on CAARA, and ensure that NDAs do not deter whistleblowers.

Failure to address these aspects in compliance programs can result in companies losing the benefits associated with an effective compliance structure when the Antitrust Division makes charging decisions and sentencing recommendations.

Guidance for reporting and seeking protection. The announcement encourages individuals to report potential antitrust crimes to the Antitrust Division's Complaint Center. For cases related to government procurement, grant, or program funding, reports should be directed to the Procurement Collusion Strike Force Tip Center. Those who believe they have been victims of retaliation or seek more information on whistleblower protections can refer to the OSHA Fact Sheet.

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