DOJ Updated Compliance Program Guidance For Prosecutors

On June 1, 2020, the US Department of Justice’s (DOJ) Criminal Division updated its “Evaluation of Corporate Compliance Programs” (the Guidance Document) to provide guidance to prosecutors on how to evaluate a corporate compliance program. Where a company can demonstrate its commitment to a culture of compliance reflected in a comprehensive program, a prosecutor may choose not to file charges or may seek reduced charges. And even if the company is found liable for a compliance lapse, a judge may impose a reduced sentence. Finally, an effective compliance program weighs in favor of the DOJ choosing not to impose monitoring requirements on a firm.

The Guidance Document covers many specific topics, but essentially asks three questions:

  1. Is the company’s compliance program well designed?
  2. Is the program applied earnestly and in good faith?
  3. Does the program work in practice?

A key part of the answer to any of these questions is a company’s compliance training program. The Guidance Document describes appropriately tailored training as “the hallmark of a well-designed compliance program” and that periodic training helps ensure that a compliance program is integrated into the organization. The firm should provide training to senior managers, relevant employees, and, in some cases, agents and business partners to properly communicate and implement its compliance policies and procedures.

The Guidance Document highlights the importance of training materials including practical advice and case studies that address real-life scenarios an employee is likely to face. The company should also train employees on how and when respond to any potential compliance violation red flags and where to obtain ethics advice on a case-by-case basis.

The Guidance Document identifies several areas of inquiry that prosecutors should pursue to determine whether a compliance program is well-designed, earnestly implemented and effective. Two of these areas provide an effective road map for companies to design, implement and improve their compliance training programs.

Risk-Based Training

The Guidance Document asks prosecutors to determine the company’s level of commitment to training, including whether the company has undertaken an analysis to determine who requires training and on what subjects. The company should provide tailored training that reflects the types and amount of risk in the work environment. A control employee or an employee who works in a high-risk role should receive training that addresses the specific risks the employee is likely to face, especially in situations where there has been prior misconduct. In some cases, employees in supervisory roles should receive supplemental or more specific training.

Form/Content/Effectiveness of Training

The mere existence of a training program is unlikely to impress a prosecutor. Instead, the Guidance Document directs prosecutors to examine the form in which the training is being provided, including whether the training is presented in the most appropriate language for the individual learner. The company must also consider whether an online training program would be more effective and efficient in-person training, given the nature of its business, the size of its employee base and the potential need for uniform training for all employees. Training should also include examples of previous, real-world compliance lapses and directions on how they should have been addressed. The company should also test employees on what they have learned and develop a plan to retrain employees who fail those tests.

The DOJ Guidance is available here.

Written by:

Thomson Reuters Regulatory Intelligence and Compliance Learning

Thomson Reuters Regulatory Intelligence and Compliance Learning on:

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