Personnel Files Are Now Fair Game in Antitrust Investigations

July 12, 2021, 8:01 AM

Unsurprisingly, U.S. antitrust agencies require businesses they’re investigating to produce strategic plans, deal presentations, e-mails and other such documents in which business people do their work. That such documents can be used (or misused) in antitrust cases is evidenced by the hours spent training employees in compliance programs on the pitfalls of creating inaccurate or ill-advised documents about subjects such as “cutting off air supply” (in the words of an infamous quote in the 1988 Microsoft antitrust case), dominating markets, and destroying competitors.

Until recently, though, no one would have thought seriously that employee personnel files—in particular, performance reviews and self-assessments—would become routine subjects of discovery in civil antitrust investigations. But a discovery dispute in a current government antitrust case shows that times may be changing. Compliance officers should take note.

Court Are Reluctant to Force Production of Personnel Files

Personnel files are, of course, not immune from discovery. Courts, particularly in considering employment discrimination claims, will require their production if they contain highly relevant, case‑specific information unlikely to be found elsewhere.

But courts are reluctant to make such files a regular subject of discovery given the strong public policy and privacy concerns about disclosure of sensitive information such as salary, health issues, tax records, and drug test results. Moreover, personnel files may contain confidential employer evaluations that the employee may never have seen.

What is different now is that the antitrust agencies—both the Department of Justice Antitrust Division and the Federal Trade Commission—are demanding the personnel files of persons whose files are being searched for regular business documents in response to document requests (custodians).

The agencies’ justification appears to be that performance reviews and self-evaluations are likely to contain admissions about “antitrust facts” such as the markets in which a company operates, market shares, and barriers to entry.

Of course, these are facts typically proven through business documents, not an employee’s or evaluator’s statements made during the context of a confidential employee assessment. And how often can you expect to see a performance review lauding “Jane” for “helping cement our dominant share of a highly concentrated local market by erecting overwhelming entry barriers?”

Google Investigation a Case in Point

Still, a discovery dispute in the ongoing antitrust case the Antitrust Division and its co-plaintiff state attorneys general (the government) brought against Google focuses on this very issue.

The parties agreed on 116 individual Google custodians. But the government also seeks those custodians’ “self-assessments and performance reviews for 2010 to the present” regardless of whether they are kept by the custodian or the human resources department. The government’s primary rationale is that the personnel files may shed light on Google’s corporate goals, the custodians’ “efforts and success in achieving those goals” and other market facts.

At the May 27 status conference, U.S. District Court for the District of Washington Judge Amit Mehta was openly skeptical of the government’s “overbroad” request, citing the files’ likely sensitivity.

Noting that he didn’t think federal courts ought to be in the business of compelling parties to produce files “just because a litigant demands it,” Mehta ordered the government to identify six of Google’s 116 custodians; Google would then review their personnel files and represent whether the files contain responsive information, and, if requested by Google, the judge would then review the materials in camera before deciding whether the government could see them.

Following the hearing, DOJ submitted under seal three draft self-assessments found in the custodians’ own document files (not their official personnel files) in order “to aid the court’s relevance review of performance reviews and self-assessments.” DOJ also pointed out that such documents were admitted as exhibits in the 2014 trial of its antitrust suit against American Express.

On June 29, Mehta ruled that he would allow production of personnel files for Google employees who will be deposed, but not for all document custodians. He also ordered the parties to devise a strict protocol (including limited, password-protected access by only a select few government attorneys) to protect the confidentiality of these sensitive documents.

Compliance Issues to Consider

Regardless of the ultimate outcome of the Google case, the antitrust agencies appear likely to continue to make performance reviews and self-evaluations regular subjects of document demands during merger reviews and other antitrust investigations. Companies—and especially compliance officers—need to be mindful of the agencies’ newfound interest in personnel files and consider these issues:

  • Business people should be just as careful to avoid puffery and provocative and hyperbolic language in personnel documents—whether touting themselves or evaluating others—as they already are in preparing strategic business documents.
  • Compliance programs that address document creation should remind employees that they need to use as much care in evaluating themselves and others as they do in other aspects of their work.
  • Parties should expect significant debates with the agencies during investigations over relevance and burden of producing such files.
  • While courts regularly allow parties to redact sensitive information during litigation, it is not clear whether the antitrust agencies will be as accepting of redactions in investigations, where they are not directly subject to judicial oversight, and parties (especially in time‑sensitive merger reviews) will be reluctant to challenge the government in court.

While the government asserts that these documents “often” provide information relevant to antitrust issues statement, the mere fact that such files may contain marginally relevant, and probably duplicative, information leaves open the question of whether the antitrust agencies should seek such documents.

Substantial privacy and public policy concerns countenance against government collection of such personal information during investigations into business conduct. If the antitrust agencies are indeed moving toward regularly seeking these files during investigations, then the importance of transparency and consistency in the investigation process warrants a public discussion of such a policy.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Author Information

Christopher J. Kelly is a partner in Mayer Brown’s Palo Alto and San Francisco offices. He focuses on antitrust litigation, including the application of antitrust law to the acquisition and use of intellectual property rights.

William H. Stallings is a partner in Mayer Brown’s Washington, D.C., office, where he co-leads the firm’s global Antitrust & Competition practice. His competition and consumer protection practice focuses on merger reviews, government investigations, cartels, litigation, and government procurement matters.

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