September 25, 2020

Volume X, Number 269

September 25, 2020

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September 24, 2020

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September 23, 2020

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Be Mindful of Overlapping Officers and Directors

As organizations create joint ventures, the creation of a board of directors of the joint venture requires careful consideration. Section 8 of the Clayton Antitrust Act of 1914 (“the Clayton Act”) prohibits an individual from serving simultaneously as an officer or a director of two competing corporations engaged in commerce. Corporations are said to be competing if “by virtue of their business and location of operation” they can be deemed to be “competitors, so that the elimination of competition by agreement between them would constitute a violation of any of the antitrust laws.” The prohibition against overlapping directorates does not apply to circumstances in which the “capital, surplus, and undivided profits” of each corporation is no more than $38,204,000 in the aggregate – or unless the competitive sales are less than $3,820,400 (or less than a small percentage, statutorily defined, of the organization’s competitive sales). Some states place similar restrictions or overlapping directorates, so organizations should keep both federal and state laws in mind when creating the joint venture board.

©2020 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume X, Number 226

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About this Author

John Steren, Epstein Becker Law Firm, Health Care Litigation Attorney
Member

E. John Steren is a Member of the Firm in the Health Care & Life Sciences and Litigation & Business Disputes practices, in the Washington, DC, office of Epstein Becker Green. Mr. Steren devotes a significant portion of his practice to helping health care organizations manage the antitrust risks of joint ventures and other business arrangements. He also focuses his practice on other complex commercial and civil litigation matters.

202-861-1825
Patricia M. Wagner, Epstein becker green, health care, life sciences
Member

PATRICIA M. WAGNER is a Member of the Firm in the Health Care and Life Sciences and Litigation practices, in the firm's Washington, DC, office. In 2014, Ms. Wagner was selected to the Washington DC Super Lawyers list in the area of Health Care.

Ms. Wagner's experience includes the following:

Advising clients on a variety of matters related to federal and state antitrust issues 

Representing clients in antitrust matters in front of the Federal Trade Commission and the United States Department of Justice, and state antitrust authorities 

Advising clients on issues related HIPAA Privacy and security

Advising clients on issues related to state licensure and regulatory requirements

202-861-4182