Lawyers could create “a big problem” for their clients if they hold back information from antitrust enforcers examining potential mergers and acquisitions, Assistant Attorney General Christine Varney warned Wednesday.
Speaking at an American Bar Association brown bag lunch in Washington at the law offices of Bingham McCutchen LLP, Varney said antitrust enforcers want to see all e-mails, memos and letters related to any side agreements that companies anticipating a merger might have reached with each other.
Sharis Pozen, Joseph Wayland, Christine Varney and Katherine Forrest at Wednesday's brown bag lunch. (photo by Andrew Ramonas / Main Justice)
Varney indicated her office isn’t going to be tougher on a company simply because it has enough information to fully understand a proposed merger agreement. “We are not unduly influenced by understanding the merger agreement in its totality,” she said. She added that seeing any side documents helps Antitrust Division attorneys see the pressures a company is facing.
“Let me be really clear, antitrust side agreements are part of the … filings,” Varney said. “And you execute them and you don’t give it to us, do it at your own peril because we will likely find out about it.”
Deputy Assistant Attorneys General Katherine Forrest and Joseph Wayland, in addition to Varney’s Chief of Staff and Counsel, Sharis Pozen, told the ABA lawyers about other blips on the division’s radar.
Forrest said the division is keeping an eye out for violations of Section 8 of the Clayton Antitrust Act, which generally prohibits an individual from being an officer or a director at two or more competing companies. She said the prohibition on more than one directorship is “alive and well.”
Section 8 is “something that I think people often lose sight of,” Forrest said.
Wayland said the division also is looking out for non-solicitation agreements, which prohibit companies from poaching employees from other businesses. He said the DOJ has been especially aggressive on non-solicitation agreements in the technology industry.
In September 2010, the DOJ reached a major settlement with Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar that ended non-solicitation agreements for employees at those companies. The DOJ claimed the technology companies had agreed not to cold call each other’s employees, limiting competition among those businesses for high tech workers.
“We are vigilant,” Wayland said.
Pozen said the division also is monitoring the health care industry for potential competition issues. She noted that the division filed a lawsuit against Blue Cross Blue Shield of Michigan last October. The DOJ claimed that deals the company made with local hospitals essentially kept other health insurance carriers from entering the market.
“We’re talking to all of the states where there are dominant providers to find out what contracting practices are being engaged in by dominant firms that are leading to harm to competition,” Pozen said.
