The criminal prosecution of corporations has been on the rise. In the 1990s major corporations were prosecuted in abundance for antitrust and environmental crimes as well as various alleged frauds. In the last decade there has been an explosion in “non-prosecution agreements” and “deferred prosecution agreements,” in which federal or state prosecutors decline to press charges in exchange for corporate concessions, which might include substantive changes in business practice, the firing of key executives, and the appointment of “business monitors” selected by the prosecutor. Federal prosecutors have entered into more than 140 of these agreements, and the corporations subject to them are a Who’s Who of international business, particularly in finance and health care.
The power to prosecute corporations as entities distinct from their employees has a long history in American law. Prior to the rise of the modern regulatory state, such prosecutions were an important means of regulating corporate behavior. Today, however, prosecutorial power rests alongside extensive civil and regulatory authority at both the state and federal level. And under both state and federal law, the government can prosecute corporations vicariously—that is, on the basis of an employee’s actions—even when the offenses are petty, the actor occupies a lower-level position, or the employee acted contrary to corporate policy.
The aggressive application of this doctrine is inconsistent with: