The Investigation Is the Thing

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Contact

As highlighted in our earlier blog post, a company’s response to a whistleblower complaint is the key to how the company will fare going forward. How the company investigates the complaint will determine how the enforcement and investigatory agencies will approach the matter, as well as how the company manages the potential for whistleblower retaliation claims. Additionally, the company’s response to a whistleblower complaint will speak volumes to employees about the company’s commitment to compliance and whether they can trust the employer to walk the talk on compliance. Credibility is the currency of effective compliance programs.

Investigations must be prompt, thorough, and free from the taint of retaliation or cover-up. Time is of the essence, especially where there are parallel government investigations with tight timetables, as under the Sarbanes-Oxley Act of 2002. Most often, if not always, the way to accomplish these objectives is to engage expert outside counsel and appropriate subject matter experts to work with internal compliance personnel. The first order of business will then be to identify key individuals for interviews and preserve and gather all potentially-relevant documents and data. The investigators then need to follow the evidence where it leads them, within the clearly-defined scope of the investigation. A disciplined investigation, well-planned and executed, will produce a reliable conclusion, giving stakeholders and agencies confidence in the integrity of the process and the result. 

Early and often throughout the investigation the primary investigators need to communicate clearly with all stakeholders about what they can expect as the investigation progresses. Of particular importance is setting expectations about further communications to those stakeholders—who will be told what, when, and in what form. Any vagueness or over-promising can create suspicion about the investigation and compromise its effectiveness and credibility. 

For example, if there will be no written report, the investigators need to make that clear, especially to the audit committee or the Board of Directors, as the case may be. Likewise, it should be made clear to the whistleblower (if he or she is known) that the particulars of the investigation will not be reported back to him or her but that the conclusion of the investigation and its outcome will be. Finally, the company should explain to the whistleblower, if his or her identity is known, that the baton has been passed to the investigators on the matter of the complaint, that he or she can rely on the company’s non-retaliation commitment, and that he or she must continue to focus on his or her job. Importantly, under many statutes with whistleblower provisions the whistleblower is entitled to anonymity as far as internal investigations are concerned, and investigators need to ensure that their communications do not reveal the whistleblower’s identity.

As for the whistleblower employee’s situation going forward, how the company handles the investigation will determine substantially whether the company’s hands effectively are tied with regard to future employment actions involving the whistleblower. The company must have—and enforce—an effective anti-retaliation policy as a component of its compliance program, and the prudent employer embraces the “righteous” whistleblower. Blowing the whistle, however, should neither erase the past sins of the whistleblower nor give him or her carte blanche to violate company policies or fail to meet his or her employer’s expectations of performance and conduct. An employer can make a legitimate, non-retaliatory adverse employment decision when it is warranted by the facts. Retaliation cases typically arise from events in real time, and they can be avoided. It is thus important to keep separate the whistleblower’s participation in the compliance process and his performance of his job duties, and the bases for any proposed employment action should be well-documented, ideally by disinterested parties. In those circumstances, courts and regulatory agencies are far more likely to find no retaliation, no matter what the outcome of the underlying investigation.

The most elegantly-described compliance program is only as good as its execution in real life. A company’s credibility with its stakeholders—and with the investigatory and enforcement agencies—depends on how it investigates whistleblower complaints.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | Attorney Advertising

Written by:

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Contact
more
less

Ogletree, Deakins, Nash, Smoak & Stewart, P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!