Directors and Officers

The Clayton Antitrust Act contains a provision that sounds like a precursor to the Sarbanes-Oxley Act of 2002. This provision prohibits any person from being a director of two or more competing corporations, if those corporation would be in violation of the antitrust provisions by merging. Basically, this means that if two companies occupy too large of a market share in a given market, no one person may sit on the board of directors of both companies. In large-scale settings, the per se rule for whether such dual-directing is lawful will be whether any of the threshold requirements for the notification and waiting period provisions would be met. Alternatively, on a smaller scale, courts might employ the Rule of Reason to determine if such a conflict of interest would unreasonably restrain competition.

The Clayton Act contains a very important provision regarding directors and officers of corporations. The Act makes very clear that not only can the corporations who engage in the prohibited anticompetitive activity be held criminally liable, but also implicated are the corporate officers and directors involved in the activity. The provision states that a violation of the provisions of the antitrust legislation shall be deemed to be also that of the individual directors, officers, or agents of such corporation. The only requirement is that the person authorized, ordered, or performed any of the acts related to the violation. The person’s individual actions need not constitute the entire crime; indeed, rarely will they do so, since antitrust prosecutions usually involve large and complex transactions. Any knowing involvement in any part of the commission of the antitrust violation will expose an individual to criminal liability. If you find yourself the target of an antitrust investigation, or have been charged with violation of any provision of the antitrust statutes, avail yourself of the expertise and experience of the attorneys at Parkman & White, LLP. Call today for a free consultation.