D&O Liability for Antitrust Violations

Abstract

This Article provides a guide for liability of directors and officers (“D&O”) for antitrust violations.

Where violations of law appear profitable, a misalignment of compensation schemes and formal compliance policies may preserve incentives to engage in misconduct. In such situations, the likelihood and prevalence of misconduct heavily depend on the effectiveness of the company’s oversight system. Antitrust violations intend to increase profit, are hard to detect, and are hard to prove. The perceived profitability of antitrust violations, thus, sometimes motivates D&O to participate in, encourage, or ignore such violations.

I review the liability standards that may apply to D&O for antitrust violations, as well as trends in relevant doctrines and enforcement policies. I explain the reasons for the growing risk of personal liability and argue that this risk is likely to continue rising in the foreseeable future. Specifically, today, D&O may be held liable for failures to make good faith efforts to develop and maintain organizational culture of compliance with antitrust law. I outline factors that D&O and their counsels should consider.

Keywords: Antitrust, Personal Liability, Oversight Liability, Fiduciary Duties