The Secure Cash & Transport Association (“SCTA”) has adopted an antitrust policy which is designed to minimize the risk of violating antitrust laws while at SCTA functions, including through formal and informal discussions before, during, and after SCTA functions. At the heart of this policy are subjects that may directly or indirectly affect competition, all of which deal with how companies compete against each other. Companies compete at many levels and in many ways, and discussion of any subject that touches on how they compete requires great care or may even be prohibited. Trade associations and their members are in a particularly sensitive position because so many competitors find themselves together at association functions, when the opportunity to talk about competitive subjects presents itself. Although discussions themselves may not violate the antitrust laws, discussion followed by uniform conduct can give rise to an unlawful agreement. Even the appearance of behavior that violates antitrust laws can lead to prosecution by the government or to lawsuits by companies or individuals damaged by anticompetitive conduct.
Some subjects are closer to the competitive process than others and must be avoided altogether, while others are less sensitive and may be discussed with great caution.
The association’s policy is to comply with all federal, state and local laws, including the antitrust laws. It is expected that all company member representatives involved in association activities and association staff will be sensitive to the unique legal issues involving trade associations and, accordingly, will take all measures necessary to comply with U.S. antitrust laws and similar foreign competition laws. The association recognizes the potentially severe consequences of failing to comply with these laws.
Our association brings significant, procompetitive benefits to industry participants, suppliers, and customers. It must not, however, be a vehicle for firms to reach unlawful agreements regarding prices or other aspects of competition, or to boycott or exclude firms from the market.
Violations of the antitrust laws can have very serious consequences for the association, its members and their employees.
Antitrust violations may be prosecuted as felonies and are punishable by steep fines and imprisonment. Individual violators can be fined up to $1 million and sentenced to up to 10 years in federal prison for each offense, and corporations can be fined up to $100 million for each offense. Under some circumstances, the maximum fines can go even higher than the Sherman Act maximums to twice the gain or loss involved. The events that give rise to an antitrust violation often provide the basis for other charges, such as wire fraud, mail fraud, and making false statements to the government. Those charges, if proven, carry additional penalties.
The consequences of a criminal antitrust violation for an association or corporation include: exposure to follow-on treble damages suits, exposure to enforcement actions in other jurisdictions or countries, disruption of normal business activities, and the expense of defending investigations and lawsuits. The consequences for an individual who commits an antitrust violation include: loss of freedom (jail), loss of job and benefits, loss of community status and reputation, loss of future employment opportunities, and exposure to litigation.
In contrast to criminal actions, civil cases can be initiated by individuals, companies, and government officials. They can seek to recover three times the amount of the damages, plus attorney’s fees. Even unfounded allegations can be a significant drain on association and membership financial and human resources, and an unproductive distraction from the association’s mission. For these reasons, the association strives to avoid even the appearance of impropriety in all its dealings and activities.
The principal federal antitrust and competition laws are the Sherman Act, the Clayton Act, the Robinson-Patman Act, and the Federal Trade Commission Act.
Certain antitrust violations are referred to as “hard core” or “per se” offenses. Conduct that falls in this category is automatically presumed to be illegal by the courts, and the absence of any actual harm to competition will not be a defense. Conspiracies falling in the hard core category are likely to be prosecuted as criminal offenses, and include the following:
There are other activities that, though typically not subject to criminal prosecution, are nevertheless sensitive, and may lead to investigations or litigation.
Association meetings, conference calls, and other activities by their very nature bring competitors together, and although they generally are lawful and procompetitive, they also might provide opportunities to reach unlawful agreements. It is important to remember that an antitrust violation does not require proof of a formal agreement. A discussion among competitors of a 4 sensitive topic, such as the desirability of a price increase, followed by common action by those involved or present, could, depending on the circumstances, be enough to convince a jury there was an unlawful agreement.
In light of the costs involved in defending antitrust claims, even when they are without merit, it is necessary to conduct association meetings in a manner that avoids even the appearance of improper conduct. Generally, the best way to accomplish this is by following regular procedures and avoiding competitively sensitive topics.
Meetings of the association will be conducted according to these procedures:
Because of their sensitive nature, certain topics will not be discussed at meetings of the association unless otherwise advised by legal counsel. These prohibitions apply equally to all association sponsored social functions or other informal association gatherings. Off-limit topics include:
Many antitrust investigations and lawsuits are fueled by poorly phrased or exaggerated statements in internal documents, with e-mails being a leading culprit. Common sense should be used when composing documents and e-mails. No matter how informal or private a communication is intended to be, it must be assumed that anything written in a document or email is potentially discoverable in an investigation or lawsuit. As a general rule, nothing should be put in writing that you would not want read aloud to a prosecutor, plaintiff’s lawyer, or jury composed of people who know nothing about you or your business.
Examples of statements that should be avoided:
The Board of Directors has the responsibility to oversee the implementation of the association’s antitrust compliance policy. The President is responsible for day-to-day management and implementation.
All members will receive a copy of this compliance policy as part of their initial orientation and will be required to sign an acknowledgment that they have read it and have been given an opportunity to ask questions.
Member companies will be sent a copy of this compliance policy, which shall also be available on the association’s website. The association’s orientation for new board members will include a presentation on antitrust compliance and member responsibilities.
Reports of noncompliance or other complaints should be quickly sent to the President. If there is reason to believe that an antitrust violation may have been committed, an investigation will be undertaken promptly. If an instance of questionable conduct is presented, the President will consult with association counsel promptly to determine whether an internal investigation is appropriate.
Members that violate or fail to comply with this policy will receive a letter from association counsel. Because compliance with association policies is a membership requirement, membership can be terminated as a result of member company violations of the association’s antitrust compliance program.
Subscribe to our newsletter and other industry related news and updates from the SCTA.
