“There has been significant shift in antitrust law enforcement from the Department of Justice (DoJ) and the Federal Trade Commission (FTC). Conduct that was historically legal is now being criminally prosecuted. While antitrust risk is a significant exposure for many companies, many Chief Litigation Officers (CLOs) are not attuned to these enforcement shifts,” says Bonnie Lau, Antitrust Litigation Partner, Morrison Foerster.

Morrison Foerster is a service provider at the marcus evans Chief Litigation Officer Summit September 2022. Lau is the co-head of the firm’s San Francisco litigation department.

How is antitrust enforcement changing? What are the civil litigation risks? 

The Biden administration has been aggressively enforcing the antitrust and competition laws in all areas, including merger enforcement, criminal price-fixing and bid-rigging, and even suggesting it will pursue criminal prosecution of monopoly claims, which is a very significant paradigm shift in the way that antitrust laws were typically prosecuted.

There is also a major development in competition law regarding labor and talent. The DoJ is now prosecuting no-poach agreements, which are agreements not to solicit, cold call, or hire employees of competitor companies. Historically, antitrust has always focused on the sales and marketing function, but in October 2016, the DoJ and FTC jointly issued updated guidelines that indicated, for the first time, that they might criminally prosecute no-poach agreements. Since then, they have begun investigating, charging, and prosecuting these types of cases, so CLOs need to be incredibly mindful of the employment antitrust risk. Even if the prosecution is unsuccessful, it can be extremely expensive to defend an investigation by the DoJ.

Of course, the civil plaintiffs bar closely tracks enforcement activity, and class action lawsuits are never too far behind a DOJ investigation or criminal case. Because antitrust cases threaten treble damages, as well as joint and several liability with no right of contribution among defendants, antitrust class action cases create significant exposure.

How can CLOs be proactive in mitigating and managing this risk?

An ounce of prevention can save your company a lot of time, expense, burden and heartache. Being proactive with respect to your compliance policies and antitrust trainings is a critically important step. Historically, an antitrust training program would include sales and marketing staff, and likely all senior executives at the company. We strongly recommend your company modify your compliance program to include all HR and recruiting staff, and to advise them that no-poach agreements regarding competitor employees creates significant antitrust risk with criminal and civil exposure. We also recommend that your company update its written antitrust policy, to make sure it is in line with current DoJ guidelines. There is an increasing awareness of antitrust risk, but more CLOs need to take a hard look at their existing compliance programs, including specifically the antitrust component.

Another way to minimize risk is by involving antitrust counsel early, which could potentially stave off a regulatory investigation or civil litigation before it occurs.

Why should CLOs consider working with a law firm that is passionate about diversity? How can that help defendants minimize damages?

There is an increased push for diverse teams on the legal and business side, as the research shows that diverse teams with diverse perspectives drive better results, more creative problem solving, and more significant litigation wins. That is why CLOs should make sure they have diverse teams on all of their litigation matters, including diverse lead partners. In addition, their counterparts across the table are increasingly diverse. Many enforcement attorneys at the FTC and the DoJ, not just staff attorneys but also their leadership, are very focused on making sure there are diverse voices at the table. Some judges are requiring diverse lead counsel, and encouraging diverse junior attorneys to have more speaking opportunities in the courtroom.

Antitrust risks are also often international, tracking the global supply or distribution chain, so CLOs may need to defend not only US regulatory and civil litigation, but also foreign antitrust enforcement proceedings. As such, diverse outside counsel can be a significant asset to CLOs and help shape the company’s multinational defense strategy. A diverse team brings to the table a cultural fluency that may help get the company’s message across to international enforcers.