## Facts

- The United States prosecuted Basic Construction Company and Henry S. Branscome (and related defendants) under § 1 of the Sherman Act for an agreement formed in April 1978 to rig bids on Virginia state road-paving contracts.
- A jury in the Eastern District of Virginia convicted all defendants of the alleged bid-rigging conspiracy.
- Basic argued at trial that the bid rigging was carried out by lower-level employees without the knowledge of senior management and contrary to company policy that prohibited bid rigging.
- The district court instructed the jury that a corporation may be held responsible for unlawful acts of its agents if performed within the scope of employment or apparent authority and for the corporation’s benefit, even if the acts violated corporate instructions or policy.
- Basic and Branscome appealed, challenging primarily the corporate-liability jury instruction and raising additional evidentiary/procedural objections.

## Issues

1. Whether a corporation may be criminally liable under § 1 of the Sherman Act for bid-rigging acts of employees performed within the scope of employment or apparent authority and for the corporation’s benefit, even if contrary to corporate policy or instructions.
2. Whether evidence of a corporate policy prohibiting bid rigging negates corporate criminal intent, requiring a different instruction, or is merely a fact for the jury to consider on the “benefit to the corporation” element.
3. Whether any additional asserted trial errors warranted reversal of the convictions.

## Decision

- The Fourth Circuit affirmed the convictions in a per curiam decision.
- The court held the district court’s corporate-liability instruction correctly stated federal law.
- The court held that a corporate policy against bid rigging did not bar corporate criminal liability; it could be considered only as evidence bearing on whether employees acted to benefit the corporation.
- The court rejected the remaining challenges as insufficient to justify reversal.

## Legal Principles

- Under federal respondeat superior principles, a corporation may be held criminally liable for unlawful acts of its agents when the acts are:
  - within the scope of employment or within the agent’s apparent authority, and
  - undertaken, at least in part, on behalf of or to benefit the corporation.
- Corporate liability may attach even when the employee’s conduct is illegal and contrary to the corporation’s express instructions or stated policies.
- A compliance policy prohibiting the unlawful conduct is not a defense as a matter of law; it is relevant evidence the jury may consider in deciding whether the agent in fact acted to benefit the corporation.

## Conclusion

The Fourth Circuit affirmed Sherman Act bid-rigging convictions and approved jury instructions imposing corporate criminal liability for employees’ bid-rigging acts within the scope of employment or apparent authority and intended to benefit the company, even when those acts violated corporate policy.


United States v. Basic Constr. Co., 711 F.2d 570 (4th Cir. 1983)