Experts: DOJ clawback pilot to be ‘work in progress’

Businesses and compliance professionals should expect the Department of Justice’s (DOJ) new compensation clawback policies to be applied on a case-by-case basis, with broad discretion, according to legal experts.

The clawback pilot program, announced March 2 by Deputy Attorney General Lisa Monaco, is part of a series of recent policy changes by the DOJ aimed at incentivizing companies to stay on the right side of ethics and the law. The agency also announced revisions to its Evaluation of Corporate Compliance Programs guidance regarding off-channel communications and new criteria for selecting compliance monitors in criminal cases.

The clawback pilot, launched Wednesday, will last three years and consists of two primary parts. First, companies are expected to link employee bonuses to compliance metrics. Second, businesses that get into trouble with the DOJ can earn a fine reduction, in whole or in part, if they seek to claw back compensation from corporate wrongdoers. If a company is successful and claws back the money, any potential fine could be reduced by the entire amount.