Close the Sentencing Guideline Gap for Corporate Convictions

Corporations that commit serious criminal offenses can cause extreme financial loss and even deaths. But under the US Sentencing Guidelines for organizational defendants, which help courts determine how to punish criminal defendants after convictions, only some offenses matter.

This gap in the law has become impossible to ignore.

Sentencing law is partly based on the premise that repeat offenders deserve greater punishment because generally they pose greater risks. They’re more likely to reoffend, causing harm to others, so they’re more in need of rehabilitation and deterrence.

For individual defendants, the sentencing guidelines achieve these goals by sharply increasing prison time for repeat offenders. For organizational defendants, the guidelines recommend greater fines for repeat offenders with convictions.

The guidelines, however, ignore the practical reality that corporate misconduct doesn’t always result in a conviction. Instead, federal prosecutors regularly use deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) to resolve corporate criminal cases.

Conviction Free

While these tools lead to fines and internal corporate reform, they don’t lead to convictions. These agreements often favor corporate defendants and the government rather than achieving the goals of corporate criminal law.

DPAs and NPAs often are used in corporate criminal cases involving extreme misconduct. Last year, the Department of Justice was granted a request to dismiss a criminal case against Boeing that followed two plane crashes that caused hundreds of deaths. Boeing’s case was unique in many ways, including being one of the deadliest corporate crimes in US history.

At first, it looked like Boeing would resolve its case with a plea agreement that would have resulted in the company’s conviction and a strong structural admonition of its crime. It received an NPA instead.

The reason wasn’t because the Justice Department decided Boeing’s offenses were not serious enough to prosecute. Instead, Boeing and the government may have wanted to avoid judicial oversight after the trial judge rejected their initial plea agreement.

Boeing’s case isn’t unique. In 2024, eBay received a DPA following allegations of corporate cyberstalking. JPMorgan has received DPAs and NPAs following allegations of market manipulation and other offenses. My research found that approximately 63% of organizational defendants have received the benefit of at least one prior DPA or NPA.

If Boeing, eBay, JPMorgan, or any other corporate defendant with a DPA or NPA is ever convicted of a future criminal offense, the court could ignore the company’s prior offenses because the sentencing guidelines don’t account for these agreements.

Despite the frequency and severity of the organization’s prior offenses, the company could be viewed as a first-time offender in the eyes of the sentencing guidelines.Even if the court does consider the defendant’s prior DPAs or NPAs, the court would have no guidance regarding how to weigh the prior agreements.

Fairness Concerns

The failure of the guidelines to meaningfully account for these deals raises fairness and deterrence concerns.

From a fairness perspective, the current framework treats similarly situated organizational defendants differently based on the procedural form of prior enforcement actions and the subjective decisions of individual prosecutors. That ignores the substance of the underlying conduct and the blameworthiness of the defendant—a disparity that’s difficult to justify.

The deterrence implications are equally significant. Sentencing guidelines that discount prior wrongdoing weaken incentives for sustained compliance, particularly for large organizations that treat criminal fines as a cost of doing business. When DPAs and NPAs are invisible for sentencing purposes, courts may not adequately and consistently ensure the criminal law’s deterrent effect.

The US Sentencing Commission can easily address this problem. The guidelines already require sentencing courts to consider a corporation’s prior convictions in setting organizational fines.

Extending the guidelines to account for agreements would be a simple change that would cause organizational sentencing to better align with the realities of modern corporate criminal enforcement. These amendments need not require courts to consider all prior DPAs and NPAs. For example, the age and quantity of prior agreements have an impact on the organization’s need for punishment and deterrence.

Considering an organization’s prior DPAs and NPAs at sentencing would preserve prosecutorial flexibility while restoring fairness and consistency to the organizational sentencing framework. It would promote deterrence and contribute to resolving the problem of organizational recidivism.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Kaleb Byars is a law professor at Mercer University School of Law who researches and writes about corporate crime.

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