Best practices for responding to government investigations

A strong investigation process can make the difference between identifying and addressing a problem early or it becoming a major issue. And a company that can demonstrate an investigative process that works has a solid foundation for productive conversations with enforcement authorities.

It is well recognized that an effective compliance program both prevents and detects violations of law and/or company policy. Perhaps just as importantly, an effective program must also have a written process for investigating and remediating violations. Below we summarize the steps that should be included in that process.

Ability to promptly address multiple issues

The response to a government investigation often must simultaneously address multiple issues, including at least:

• Understanding the allegations and which laws may have been violated.
• Preparing for the possibilities of potential civil litigation brought by an aggrieved employee, counterparty, or class of plaintiffs.
• Ensuring that appropriate governance standards are followed both during and after the investigation.
• Addressing requirements of the company’s outside audit firm.
• Identifying remediation efforts to prevent re-occurrence if there has been a compliance failure.

 Written protocol should guide the investigation

Because it is difficult to manage multiple issues in the heat of an emergent investigation, it is valuable to have an investigations protocol to follow. This type of roadmap can guide personnel even in the case of an investigation necessitated by a safety or security issue, where initial energy is focused on employee welfare.

As a general matter, it is useful to maintain regular communication with the government during the investigation. This builds trust and thereby increases the chance that the government will allow the company to maintain autonomy over the investigation. Regular and productive communication also makes it more likely that the government will be satisfied with the scope and results of the investigation.

The principal elements of an effective investigation, and features that should be included in the written protocol, are as follows:

Investigation plan. This includes both scoping the investigation based on communications with the government and developing an investigation plan that reflects that scope. The plan should set forth timelines for tasks and establish who is on the investigative team while acknowledging that the scope and plan may need to be reassessed and validated as facts develop.

Preserving data. A thorough investigation is not possible without relevant data. It is essential to have a process to ensure that data is preserved, including the issuance of preservation instructions and the modification of internal data storage, deletion, and management protocols.

Collecting data. Collecting data can involve significant cost and disruption to the business. Additionally, the types, sources, and amounts of data potentially available for review continue to grow, as do data privacy laws. While email and other electronically stored data is often most relevant, pertinent hard copy documents may also exist. This is especially true in jurisdictions in the developing world where technological capabilities are less advanced and hard copies of ledgers and other records are often the norm. Thus, do not assume that a remote, electronic capture is sufficient.

Reviewing data. Once collected, data must be reviewed. It will likely be possible to use artificial intelligence tools to narrow the amount of data that has to be reviewed. Key in this phase of the work is to ensure that privileged materials are identified and treated accordingly.

Conducting interviews. Interviews are often the best chance to obtain relevant information, so plan accordingly and consider the following:

• Where – e.g., at the facility or offsite – and when will the interview take place?
• Will the employee need to have their own lawyer present at the interview? Especially if the employee does not have their own lawyer, it is generally advisable to give the Upjohn warning (i.e., the interviewer represents the company not the employee, the conversation is subject to the attorney client privilege, and that privilege belongs to the company, not the employee).
• Should nonemployees be interviewed?
• In which order should interviews be conducted?
• Are telephone interviews appropriate?
• How many people should be present at an interview?

Reporting and remediation. The report on the investigation may be primarily in writing, oral, or a combination, depending on what the government requires. Regardless of form, the report must identify the root cause of any violation and corrective actions to remediate misconduct. Additionally, specific responsibility for each remedial action should be assigned to a named individual so that management can monitor and drive completion of these actions.

Conclusion

No two government investigations are the same. Yet there are steps that should always be followed to maximize the chance that the investigation will satisfy legal obligations, respond to allegations of misconduct, and promote a culture of compliance.