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Key Takeaways:

-    During a government investigation in-house counsel must always protect the interests of the company, which may be different than the interests of employees. 
-    Companies can mitigate damage to their organization by cooperating with the government to obtain leniency. 

When cooperating with a government investigation in-house counsel must be careful to protect the interests of the company when dealing with employees who may be involved in the conduct that is the basis of an investigation.

This article was prepared by the Association of Corporate Counsel based on the ACC 2021 Annual Meeting presentation, “Avoiding Pitfalls When Cooperating with the Government,” a session that was presented by Bernadette Miragliotta, Managing Counsel American Express, Funmi Olorunnipa Badejo, Special Assistant to the President & Associate General Counsel, White House Counsel’s Office, Khadija Waugh, Director & Assistant General Counsel, CME Group, Shari A. Brandt, Perkins Coie LLP, and Margaret W. Meyers, Partner, Perkins Coie LLP.

Cooperation with the government during a criminal investigation is a way for companies to mitigate damage and obtain leniency. Most government agencies have guidance on how they apply cooperation for cooperation credit. The US Department of Justice (DOJ) gives cooperation credit if a company discloses the relevant conduct and which employees were involved.

Cooperating with the Government

-    Companies should try not to place the blame on certain employees, because if the employee is indicted and acquitted, the employee could sue the company. 
-    When reporting facts to the government, a company should pay attention to no waiving privilege.
-    A company should investigate key employees to determine their involvement.

What In-house and Outside Counsel Handle

-    In-house counsel should do the initial investigation to determine the scope of the investigation.
-    If the government has indicated that they have several people working on the case, it would be particularly helpful to use outside counsel since the investigation may be large and complex.
-    Outside counsel is a better choice if the government is requesting many documents.

When Employees Should Have Their Own Counsel

-    Companies should have an existing process in place for representation of employees during a government investigation.
-    A company must be careful not to waive privilege, for example if another department than Legal in the company, such as the HR department, questions an employee in connection with the investigation.
-    In-house counsel’s responsibility is to represent the company, not the employees. 
-    The DOJ policy on cooperation requires that a company identify employees who were substantially involved in the conduct under investigation. The government may object to the company and employees having the same counsel. 
-    A company does not want to appear to be directing an employee to hire a certain lawyer to represent them.

Document Production

-    Preserving documents is routinely done for reasons such as HR issues or governance responsibilities.
-    The government’s notification that it is investigating a company triggers the responsibility of the company to preserve any documents it has that may be related to the investigation. 
-    Companies should have a process in place to handle complaints and preserve documents in case a complaint turns into an investigation. 

Employee Devices

-    There is a risk to companies when employees use their own personal devices at work to conduct company business that may later involve a government investigation.
-    Companies should have a clear policy on the use of personal devices at work, including recordkeeping requirements.
-    Companies should provide a list to all employees of approved apps for communication on personal devices at work. 

Learn More:

ReadSeeing Clearly: Practical Advice for Internal Investigations” by Monica Allen, Steve Bishara, and Matthew Schelp, ACC Docket, April 2018, pp. 24-32.

ReadRe-thinking Independence in Internal Investigations” by Katia Bloom, Jessica K. Nall, and Joshua W. Malone, ACC Docket, May 2018, pp. 66-72.

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The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.

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