DOJ Promises Corporate Criminal Prosecutions

By Stephen Lee

Sept. 11 — In a move that could prove a boon to worker advocates, the Justice Department said Sept. 10 that it will begin pushing for the prosecution of individual executives, not just the corporations for which they work.

The policy matches up with the ongoing efforts of a loosely knit group of activists across the nation who are trying to get their district attorneys to push for criminal prosecutions and even jail sentences in worker safety cases.

“Crime is crime. And it is our obligation at the Justice Department to ensure that we are holding lawbreakers accountable regardless of whether they commit their crimes on the street corner or in the boardroom,” Deputy Attorney General Sally Yates said at a speech at the New York University School of Law. “In the white-collar context, that means pursuing not just corporate entities, but also the individuals through which these corporations act.”

Under the new policy, DOJ attorneys are instructed to focus on individuals from the start of an investigation, Yates said.

‘All or Nothing.'

Companies must also identify all individuals involved in wrongdoing in order to get credit for cooperation, Yates said.

“It's all or nothing,” she said. “No more picking and choosing what gets disclosed. No more partial credit for cooperation that doesn't include information about individuals.”

By holding individuals accountable, “we can change corporate culture to appropriately recognize the full costs of wrongdoing, rather than treating liability as a cost of doing business,” said Yates.

The new policy takes effect immediately, she said.

Real Change or Window Dressing?

Matthew Shudtz, executive director of the Center for Progressive Reform, called the announcement a step in the right direction.

“But it remains to be seen how this will actually play out, especially in the workplace health and safety context,” Shudtz told Bloomberg BNA Sept. 10. “The [Occupational Safety and Health] Act has notoriously weak criminal provisions, and it’s not clear that this new policy does much to create stronger incentives for U.S. Attorneys to put significant effort into cases that aren’t mass casualties, like the Upper Big Branch and Deepwater Horizon disasters.”

CPR has been advocating for state and local prosecutors to explore how their criminal codes might be used to punish and deter the more common workplace deaths that happen more regularly.

Similarly, Ross Eisenbrey, vice president of the Economic Policy Institute, reserved judgment on whether Yates' statement signaled a meaningful policy shift or mere political posturing.

“The proof is in the pudding,” Eisenbrey told Bloomberg BNA Sept. 10. “If they actually bring criminal cases against individuals, then you’ll know that it’s more than window dressing.”

The Obama administration has been criticized for its general failure to prosecute Wall Street executives in the wake of the financial collapse and housing meltdown.

More broadly, Eisenbrey said the intention is a good one, and represents the best way to hold corporations accountable.

Corporate Accountability

To illustrate, he pointed to the 2014 indictment of Don Blankenship, chief executive of Massey Energy, for his role in the 2010 Upper Big Branch mine explosion that killed 29 workers.

“Blankenship ran his operation recklessly, without regard to the safety of the miners who were underground, and he did it for his own profit,” Eisenbrey said. “And he profited enormously. He’s been enriched, and even if, at some point, the corporation has to pay a fine, he’s still been enriched. He’s salted away tens of millions of dollars or more. And it was his decision-making that led to people’s injury and death. Why shouldn’t he be responsible?”

Marc Freedman, executive director of labor law policy at the U.S. Chamber of Commerce, noted that criminal sanctions under the OSH Act require both a death and a willful citation.

“So it’s still a high bar, and still a relatively infrequent set of circumstances,” Freedman told Bloomberg BNA Sept. 10.

‘Not the Standard We Need.'

David Sarvadi, an industry attorney with Keller & Heckman LLP, told Bloomberg BNA last month that worker advocates' effort to seek criminal prosecutions goes too far.

“These people want to criminalize ordinary human frailty,” Sarvadi said. “The criminal law is about preventing intentional acts, or acts that, in the opinion of society, should not have occurred. But what these folks are after is, if someone gets hurt, they want someone to go to jail. And that’s not the standard we need.”

Freedman broadly agreed.

“This administration doesn’t need any encouragement to be aggressive against employers,” he said.

Worker advocates scored a major win on Aug. 13, when Bumble Bee Foods agreed to pay $6 million—the biggest settlement for a case of its kind—for violating safety rules after a worker died after being trapped inside an industrial oven (People v. Bumble Bee Foods LLC, Cal. Super. Ct., No. BA453950, settlement agreement, 8/2/15.)

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To contact the editor responsible for this story: Larry Pearl at