Clifford Chance

Seven, Eight, Lay Them Straight: Seven Directors Resign From Corporate Boards Over Section 8 Interlocking Directorate Issues

October 21, 2022

Understanding the rules around interlocking directorates should be a priority for companies and their counsel. Following months of foreshadowing tough enforcement by the U.S. antitrust agencies, the Department of Justice's Antitrust Division announced on October 19 that seven directors had resigned from the boards of five companies to resolve the Division's concerns regarding interlocking directorates, although no companies admitted liability. The Clayton Act Section 8 ("Section 8") prohibits any "person" from serving as an officer or director of two competing companies. The Division announcement is notable for several reasons: it evidences the fact that the Division is actively seeking to enforce Section 8; it highlights the Division's stance on how Section 8 relates to financial investors, particularly private equity firms; and it serves as a warning shot that more enforcement in this area is likely to come.

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