On November 14, 2012, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) jointly issued a guide to the Foreign Corrupt Practices Act (FCPA) titled: A Resource Guide to the U.S. Foreign Corrupt Practices Act (Guide). HR professionals and corporate employment counsel should focus closely on the section of the Guide titled “Corporate Compliance Program” (p.56), as it addresses steps companies should take to train employees, create ethics and compliance policies, employees to engage in ethical and lawful behavior and discipline those who engage in misconduct.
Given that whistleblower litigation is on the rise and often implicates sensitive compliance issues, including FCPA issues, corporate employment counsel and HR professionals should understand and participate in the implementation of the following aspects of the Guide:
Employers are encouraged to incentivize employees to engage in ethical and lawful behavior. According to the government, effective incentives may range from favorable performance evaluations and promotions to bonuses for behavior that exhibits compliance-related leadership.
The DOJ and the SEC will focus on whether a company has appropriate and clear disciplinary procedures, whether those procedures are applied reliably and promptly, and whether they are commensurate with the purported FCPA violation. The Guide also encourages companies to publicize disciplinary actions internally, “where appropriate under local law.” Employers, however, should be mindful of the risk that such actions have the potential to lead to defamation- and privacy-related claims, and could impact workplace culture and dynamics.
Ethics and compliance training is needed for employees at all levels. The Guide recognizes that web-based and in-person trainings are common, and does not favor one form over the other.
Employers need to craft and widely disseminate thorough codes of conduct and policies that detail proper internal controls, auditing practices, documentation and disciplinary procedures. Employers should ensure that their policies strictly prohibit any form of retaliation, provide multiple channels for reporting, and allow for anonymous reporting.
Our Whistleblowing & Retaliation Group is well equipped to assist corporate employment counsel and HR professionals in drafting effective policies and procedures, conducting training, creating incentive structures and providing discipline-related counseling in a manner that minimizes the risk of discrimination and retaliation claims. Working with counsel to take these steps, corporate employment counsel and HR professionals can help their companies realize a range of benefits, including: positioning the company for government investigations in a manner than minimizes penalties; heightening compliant employee behavior and fostering an ethical environment; minimizing the risk of whistleblower retaliation claims; and strengthening defenses to whistleblower claims where litigation is unavoidable.