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In brief

On October 19, 2022, the U.S. Department of Justice’s (DOJ) Antitrust Division announced that seven directors had resigned from their respective corporate board positions in response to concerns of interlocking directorates.1 This announcement followed reports that DOJ had issued letters to numerous public companies, investors, and individuals last month. The letters reportedly indicated that DOJ was examining potential interlocks and advised the targets of the risk of potential enforcement actions.2 DOJ’s muscular posture toward enforcement under Section 8 of the Clayton Act is only the “first in a broader review of potentially unlawful interlocking directorates.”3

Key takeaways

  • DOJ is aggressively scrutinizing possible interlocking directorates, resulting in multiple director resignations.
  • DOJ is expected to continue its assertive approach to Section 8.
  • Based on the recent resignations, DOJ appears to be addressing both direct and indirect interlocks–including interlocks within companies backed by private equity and investment firms.
  • Corporations and directors should consider reviewing their Section 8 risk and implementing appropriate safeguards—including implementing annual assessments of any such risk.

In depth

Section 8 Legal Framework

Section 8 of the Clayton Act prohibits an individual from simultaneously serving as an officer or director on the boards of two or more “competing” corporations (otherwise known as an “interlocking directorate”).4 A breach of Section 8 is a strict liability or per se offense. Nevertheless, an interlocking directorate is exempt from Section 8 in the following circumstances:

  • Either company has less than $41,034,000 in total capital, surplus, and undivided profits; or
  • When competitive sales of:
    1. either corporation are less than $4,103,400;
    2. either corporation are less than 2% of the corporation’s total sales; or
    3. each corporation are less than 4% of the corporation’s total sales.5

The typical remedy is injunctive relief (e.g., removing the individual from one of their positions to eliminate the interlock). Private parties are also able to pursue private actions and technically can seek damages, though we are not aware of any instance where a plaintiff has successfully obtained damages under a Section 8 claim. 

In general, Section 8 addresses two types of interlocking directorates:

  • Direct Interlocks. Direct interlocks exist where a specific individual simultaneously serves as a director or officer on two or more competing companies.
  • Indirect Interlocks. Indirect interlocks can occur through a variety of scenarios. Courts have recognized that certain commingled board relationships may be sufficient to support an indirect interlock finding (e.g., an investment firm appointing different individuals to serve on the boards of its competing portfolio companies).6 The key issue in determining the presence of prohibited indirect interlocks is the extent of control exercised over the affiliated company. Although case law is not settled in this area, DOJ and FTC have obtained relief in the context of certain indirect interlock challenges.7

Closer Analysis of DOJ’s Most Recent Enforcement Action

The recent resignations follow a string of DOJ enforcement actions.8 The resignations occurred in five different matters. All the resignations seemingly involved direct interlocks, and two also may have involved indirect interlocks.  

  • In all five matters, a director sat on the board of two competing companies and therefore created a direct interlock. In each of those matters, the director resigned from one board to eliminate the interlock.
  • In one matter, two directors may have stepped down because of an indirect interlock. That is, three directors were employed by the same investment firm, and one of the three directors sat on the boards of two competing firms. As a result of the single director’s interlock, all three directors resigned from the board of one of the two competing companies.

Recommended Actions

Compliance Tips

Section 8 is expected to continue to be a priority in DOJ’s enforcement agenda, and the recent issuance of letters show that DOJ will be scrutinizing potential interlocks. As a result, corporations should consider taking steps to mitigate Section 8 liability. In particular:

  • Companies should consider conducting annual check-ups of directors’ and officers’ board memberships to avoid any concerns presented by potentially developing Section 8 interlocks. This is especially the case for companies in dynamic industries where new competition may emerge quickly and frequently.
  • Companies that have not conducted an annual review should consider doing so as soon as possible.
  • Companies, including private equity firms or investment companies, should be aware that where two firm employees sit on the boards of competing companies, an interlock concern could arise.
  • Although Section 8 expressly refers to officers or directors, certain courts have opined that Section 8 liability may be extended beyond officers and directors under an agency theory—e.g., where a company’s agent sits on the board of a competitor of that company.9
  • Interlocking directorates also may raise risk under Section 1 of the Sherman Act or Section 5 of the Federal Trade Commission Act—as an interlock may facilitate (or be perceived to facilitate) a separate antitrust violation. Consequently, whether or not an exemption may apply under Section 8, it is important to consider implementing organizational safeguards such as firewalls between potentially interlocked executives and procedures for directors when handling competitively sensitive information.   

1 See DOJ, Directors Resign from the Boards of Five Companies in Response to Justice Department Concerns about Potentially Illegal Interlocking Directorates [“DOJ Announcement”].
2 See LexBlog, Word on the Street: DOJ Issuing Inquiries Into Director Interlocks.
3 See DOJ Announcement.
4 15 U.S.C. § 19, s. 1.
5 Id. at s. 2. These dollar figures are adjusted annually.
6 See Reading Int’l, Inc. v. Oaktree Capital Mgmt. LLC, 317 F. Supp. 2d 301 (SDNY 2003).
7 See United States v. Crocker Nat’l Bank, 656 F.2d 428, 450 (9th Cir. 1981) and In re Borg-Warner Corp., 101 F.T.C. 863, 925, modified, 102 F.T.C. 1164 (FTC 1983).
8 See e.g., DOJ, Press Release, Tullett Prebon and ICAP Restructure Transaction after Justice Department Expresses Concerns about Interlocking Directorates (July 14, 2016) and DOJ, Press Release, Endeavor Executives Resign from Live Nation Board of Directors after Justice Department Expresses Antitrust Concerns (June 21, 2021).
9 “Officer” is defined as an “officer elected or chosen by the Board of Directors.” 15 U.S.C. § 19(a)(4). The authors would like to thank Milinda Yimesghen (TO) for her contributions to this article.


Brian Burke is a partner in Baker McKenzie's Washington, DC office. He draws on over 20 years of experience to counsel clients on all federal antitrust issues. He assists clients in successfully navigating the merger clearance process before the US as well as international antitrust authorities. Brian also has extensive experience advising clients on civil and criminal governmental antitrust investigations, commercial antitrust litigation, antitrust compliance programs, risk assessments, and pricing and distribution policies. Brian holds multiple leadership positions in the Firm. He is a member of the Steering Committee for the Firm's North American Antitrust Practice Group, as well of the Global Antitrust and Competition Taskforces for Healthcare, Energy Mining and Infrastructure, and Consumer Goods Industries. He also serves as the co-head of the Firm's Merger-Control Task Force.


Nandu Machiraju is a counsel in Baker McKenzie's North America Antitrust & Competition Practice Group. He has significant industry experience in antitrust matters affecting the healthcare, pharmaceuticals, chemicals, mining, and technology sectors. Nandu advises clients on a wide range of antitrust matters and has considerable experience counseling clients in government investigations, proposed mergers and acquisitions, conduct matters, compliance, and litigation. Before joining the Firm, Nandu worked as an attorney with the US Federal Trade Commission (FTC). Most recently, Nandu was an attorney in the Bureau of Competition’s Litigation Group where he served a critical role on merger litigation challenges in the hospital and medical-device industries. Before that, he served as an Attorney Advisor to FTC Chairman Joseph J. Simons where he advised on enforcement, appellate advocacy, policy, and congressional relations as well as matters relating to agency management. Nandu also was an attorney in the Mergers I Division where he worked on mergers involving pharmaceuticals, medical devices, retail pharmacies, and cement plants. Before joining the FTC, Nandu was an associate at an international law firm where he practiced antitrust and competition law in that firm’s Washington, D.C. and Brussels offices.


Creighton Macy is the Chair of Baker McKenzie's North America Antitrust & Competition Practice Group. Creighton is recognized as a leading global antitrust practitioner.

Creighton has extensive experience representing clients in a wide variety of antitrust matters, including mergers and acquisitions, investigations by the United States Department of Justice and the Federal Trade Commission, private litigation, and counselling on issues such as antitrust compliance. Before joining the Firm, Creighton served as Chief of Staff and Senior Counsel in the DOJ Antitrust Division, working as a senior advisor to the Assistant Attorney General on civil and criminal antitrust enforcement and policy matters, as well as budget and personnel issues. During Creighton's time at the DOJ, the Antitrust Division undertook an unprecedented volume of high-profile civil and criminal matters.

Creighton began his career as a Trial Attorney in the Litigation III and Transportation, Energy, and Agriculture sections of the Antitrust Division, working on a number of notable merger and civil non-merger investigations and cases. Before rejoining the Antitrust Division as its Chief of Staff, he was a member of another global law firm's antitrust practice, where he advised clients on a wide range of US and international antitrust issues.

Creighton is consistently recognized globally for his market-leading antitrust practice with respect to high-stakes transactions, investigations, and compliance and counseling work. For example, clients have noted that Creighton “shines above the rest’ due to his first-rate cartel and merger control-related practice.’” He also regularly speaks and publishes articles relating to a variety of antitrust issues, and has been recognized many times for his contributions and thought-leadership on these issues.

Creighton is currently Co-Chair of the American Bar Association Antitrust Law Section’s Young Lawyers Task Force. In previous roles, he served as Reporter of the Presidential Transition Task Force, as well as Chair of the Trade, Sports, and Professional Associations Committee. He is highly involved in mentoring programs, including with the Antitrust Law Section, as well as Marquette University Law School, where he previously served as the DC Representative of the Alumni Board.

Creighton graduated from Marquette University, where he was an NCAA Division I Academic All-American tennis player. During his time at Marquette, he was awarded the Athletic Department’s Cura Personalis award by his peers, as well as several leadership awards. More recently, Creighton was named the Athletic Department’s Young Alumnus of the Year Award.


Daniel Gao is an Associate in Baker McKenzie, New York office.


Darley Maw is an associate in Baker McKenzie's Antitrust & Competition Practice Group in New York. She regularly represents and counsels clients across multiple industries in matters pertaining to antitrust, corporate governance, intellectual property, and commercial contract disputes in federal and state court. Prior to joining the Firm she was a litigation associate at a large national law firm, counseling clients across multiple industries in complex commercial disputes. Prior to that, Darley was a judicial clerk for the Honorable Joel H. Slomsky, US District Court for the Eastern District of Pennsylvania.

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