USA: Corporate Investigations 2021
This article first appeared in the International Comparative Legal Guide to: Corporate Investigations 2021, published on 4 January 2021.
1. The Decision to Conduct an Internal Investigation
1.1 What statutory or regulatory obligations should an entity consider when deciding whether to conduct an internal investigation in your jurisdiction? Are there any consequences for failing to comply with these statutory or regulatory regulations? Are there any regulatory or legal benefits for conducting an investigation?
Under U.S. law there are very few statutory or regulatory obligations to conduct an investigation, and the question of whether and when to investigate is typically left to the discretion of company management. However, despite the absence of affirmative obligation, there are significant incentives under law for a company to investigate any allegation or suspicion of misconduct. As a general rule, businesses that identify, investigate, and self-report misconduct prior to a government investigation may receive leniency in any subsequent enforcement action. Further, where a government investigation commences without a self-report from the company, the company can nonetheless benefit from commencing and conducting an internal investigation alongside, and in coordination with, U.S. authorities.
In certain limited circumstances, public companies and other highly regulated entities may be subject to statutory and regulatory obligations to conduct internal investigations, depending on the nature of the alleged or suspected misconduct. For example, corporate officers of companies that are registered with the U.S. Securities and Exchange Commission (SEC) periodically certify that financial reports accurately reflect the registrant’s financial condition. Accurate certification may require a company to investigate any allegation of misconduct occurring during the reporting period that could materially affect its financial condition. Similarly, member-entities of self-regulatory organisations (SROs) may be subject to SRO rules that require them to conduct investigations in certain circumstances. For example, the Financial Industry Regulatory Authority (FINRA) requires member firms to promptly investigate suspicions of insider trading.
In the broad range of circumstances where investigation is not obligatory, but rather discretionary in nature, regulators and prosecutors, including the SEC, Department of Justice (DOJ), Commodity Futures Trading Commission (CFTC), and Office of Foreign Assets Control (OFAC) grant leniency or cooperation credit to companies that investigate and self-report violations, or conduct an investigation alongside and in concert with the authorities. For example, the DOJ’s Guidance on the Evaluation of Corporate Compliance Programs, which was recently updated again in June 2020, continues to identify the existence of an effective investigation process and structure as a hallmark of an effective compliance programme and something that should be considered by prosecutors in determining the resolution in a corporate criminal investigation. In September 2020, the CFTC also issued guidance on evaluating compliance programmes in connection with enforcement matters, which identifies detection and evaluation of misconduct as factors to be considered by the Enforcement Division’s staff in determining an appropriate civil monetary penalty.
1.2 How should an entity assess the credibility of a whistleblower’s complaint and determine whether an internal investigation is necessary? Are there any legal implications for dealing with whistleblowers?
An appropriate response to a whistleblower complaint requires some degree of investigation, irrespective of any perceived lack of credibility. Companies that fail to investigate a whistleblower complaint because they choose to disbelieve the whistleblower take significant and unnecessary risk. Of course, the degree of investigation may depend in part on an assessment of the whistleblower’s credibility, including an assessment of the whistleblower’s role in the organisation, his or her direct knowledge of the events in question, and the existence or non-existence of corroborating information.
A company’s response to a whistleblower complaint may impact whether U.S. authorities will choose to bring an enforcement action. For example, the SEC’s Whistleblower Program, established under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), specifically encourages whistleblowers to report misconduct internally prior to approaching the SEC. This gives companies the chance to investigate. If the SEC, or any other U.S. regulator or prosecutor, believes a company given such a chance has not adequately investigated the complaint, it can increase the chance of a subsequent enforcement action.
Whistleblowers employed by publicly traded companies are afforded significant protections under the Dodd-Frank Act and the Securities Exchange Act, among other regulations. Protection under the Dodd-Frank Act’s anti-retaliation provision, however, is available only to whistleblowers who report the alleged misconduct directly to the SEC. Consequently, whistleblowers may be inclined to report to the SEC shortly after reporting internally, and companies should consider this factor in determining whether to promptly proceed with an internal investigation. Additionally, public companies may face civil or criminal liability for discriminating or retaliating against whistleblowers who provide information to supervisors or government officials.
1.3 How does outside counsel determine who “the client” is for the purposes of conducting an internal investigation and reporting findings (e.g. the Legal Department, the Chief Compliance Officer, the Board of Directors, the Audit Committee, a special committee, etc.)? What steps must outside counsel take to ensure that the reporting relationship is free of any internal conflicts? When is it appropriate to exclude an in-house attorney, senior executive, or major shareholder who might have an interest in influencing the direction of the investigation?
Attention to this question at the outset of any investigation is essential. The client should be explicitly defined at the start of the outside counsel’s engagement and set out unambiguously in writing. Ultimately, questions regarding the identity of the client are determined by the party seeking representation, and not by counsel. In the case of an internal investigation, the client can be the company itself, but is often the board of directors, or a sub-group of the board, such as the audit committee, whose mandate often includes the conduct of internal investigations. Where the company is the client, the company will often request that the outside counsel represent both the entity and those employees of the entity whose interests are not divergent, which is appropriate and not objectionable. If there is even slight potential for corporate and individual interests to diverge, this issue should be identified early during the course of any investigation and the affected individuals should be advised to retain their own counsel, or counsel should be arranged for them. Often, similarly situated individuals needing representation separate from the entity can be represented jointly by “pool counsel”.
Individuals whose conduct is, or may be, implicated in the investigation should not participate in the direction of the investigation and should not participate in the investigation’s reporting structure while the investigation is in progress.
2. Self-Disclosure to Enforcement Authorities
2.1 When considering whether to impose civil or criminal penalties, do law enforcement authorities in your jurisdiction consider an entity’s willingness to voluntarily disclose the results of a properly conducted internal investigation? What factors do they consider?
Self-reporting is a significant factor in the calculation of what, if any, penalty to impose for misconduct. Regulators and civil and criminal enforcement authorities typically consider a company’s timely and voluntary disclosure in determining whether to bring a criminal or civil enforcement action against the company. If a proceeding is ultimately brought, voluntary disclosure may be a significant factor in a regulator’s decision to seek a reduced penalty.
For example, in evaluating the appropriate sanction, the DOJ, SEC, and CFTC consider an entity’s self-disclosure and subsequent cooperation, which can include document production and assistance with employee interviews, as one of a number of relevant factors, including the nature and seriousness of the offence, the entity’s history of misconduct (if any), the existence and effectiveness of the entity’s compliance efforts, and the actions the company has taken in response to the misconduct.
Many regulators and prosecutors, including the SEC and CFTC, have recently adopted policies explicitly stating that in order to receive cooperation credit, an entity must identify all employees involved in or responsible for the misconduct and provide all facts relating to the misconduct. The DOJ recently revised its policy so that it no longer requires the identification of all individuals involved in or responsible for the misconduct but requires the identification of all individuals substantially involved in or responsible for the misconduct for the company to receive any cooperation credit.
The DOJ has also adopted a policy that discourages “piling on”, that is, multiple regulators imposing multiple penalties on a company in relation to investigations of the same conduct. The policy encourages greater coordination among DOJ components as well as with other federal, state, local, and foreign enforcement authorities. The policy sets forth factors considered by the DOJ in determining whether multiple penalties serve the interests of justice, including the egregiousness of the wrongdoing, statutory mandates regarding penalties, the risk of delay in finalising a resolution, and the adequacy and timeliness of a company’s disclosure and cooperation with the DOJ. Nevertheless, the frequency of corporate resolutions involving the payment of fines and penalties to multiple enforcement agencies does not appear to have declined.
2.2 When, during an internal investigation, should a disclosure be made to enforcement authorities? What are the steps that should be followed for making a disclosure?
If and when an entity becomes reasonably certain of misconduct constituting civil or criminal wrongdoing, it should consider self-reporting to capture the significant benefits of early cooperation credit and voluntary disclosure. However, while an investigation need not be completed prior to self-reporting, the entity and outside counsel (if any) should thoroughly understand the scope of the alleged conduct and the identity of the individuals involved to avoid incomplete or inaccurate disclosure that may diminish prospects for cooperation credit and unnecessarily increase regulators’ scrutiny.
2.3 How, and in what format, should the findings of an internal investigation be reported? Must the findings of an internal investigation be reported in writing? What risks, if any, arise from providing reports in writing?
Investigative findings need not be reported in writing. Oral presentations best preserve applicable privileges and permit interim reporting prior to reaching final conclusions, avoiding memorialising inconsistencies that can ultimately be resolved prior to the investigation’s conclusion. However, when an investigation in a matter that has attracted attention and public scrutiny is complete and the findings are secure, a publicly available written report may be desirable for reputational or other reasons.
3. Cooperation with Law Enforcement Authorities
3.1 If an entity is aware that it is the subject or target of a government investigation, is it required to liaise with local authorities before starting an internal investigation? Should it liaise with local authorities even if it is not required to do so?
Companies are not generally required to seek permission or otherwise to confer with regulators before investigating. However, in certain limited circumstances where a company is in a cooperative posture, regulators may make requests to the company about contacting certain individuals in order to preserve the sanctity of the regulator’s parallel investigation.
Although liaising with authorities is generally not required, it is often advisable, for the reasons described elsewhere in this chapter. A company under investigation may benefit from disclosing the existence and preliminary findings of its internal investigation to the investigating authority not only because of eventual cooperation credit, but also to help confine the contours of the outside investigation. However, a company cooperating with authorities should be aware that if it is later deemed that the company was directed in the conduct of its investigation by the government, such that the company could be argued to have acted as the government’s agent in the course of the investigation, the failure by the company to afford certain Constitutional protections to its employees may be the subject of later litigation regarding the admissibility of statements and other evidence obtained in the course of the investigation.
3.2 If regulatory or law enforcement authorities are investigating an entity’s conduct, does the entity have the ability to help define or limit the scope of a government investigation? If so, how is it best achieved?
Where regulators act within the lawful scope of their authority, a corporate entity has little ability, aside from cooperation and self-disclosure, to control the scope of a government investigation, which is ultimately a matter of the government’s discretion. However, where an entity cooperates with the investigation, discloses its own investigation, and shares its findings with the government, such cooperation and disclosure may serve to focus the government’s investigation and limit its scope. Where an entity is not in a cooperative posture with the government, and a regulator exceeds its authority, the entity may have recourse to the judicial system to oppose investigative measures and requests that are intrusive and burdensome, but such recourse is typically limited.
3.3 Do law enforcement authorities in your jurisdiction tend to coordinate with authorities in other jurisdictions? What strategies can entities adopt if they face investigations in multiple jurisdictions?
Cross-jurisdictional coordination between U.S. authorities and law enforcement and regulatory agencies outside the U.S. is commonplace and increasing. The most recent high-profile example of such coordination involved the DOJ cooperating with the U.K. Serious Fraud Office and the French Parquet National Financier to conduct a foreign bribery investigation against Airbus, which led to a global settlement of the matter.
Given the increasing level of both domestic and cross-border inter-agency cooperation and coordination, entities subject to investigation should assume, as a matter of course, that information presented to one authority will be shared with other authorities, whether domestic or foreign. When that happens, it is essential that the information presented to multiple authorities be consistent. Such consistency is best achieved through coordination with regulators, which has the additional benefit of easing the burden of responding to multiple and different requests for information from various authorities. Entities under investigation should seek to liaise with regulators early in the investigative process, harmonise where possible the scope of the investigations, and identify opportunities to eliminate duplicative work and the risk of inconsistency. For example, counsel may choose to create document depositories with rights of access for multiple regulators or invite multiple authorities to witness interviews. Additionally, entities should be mindful of agreements between government authorities that allow the sharing of information in one jurisdiction to another jurisdiction’s authorities, such as the U.S.-U.K. Bilateral Data Access Agreement, which became effective in July 2020 and allows U.S. and U.K. law enforcement agencies to compel U.S. and U.K. cloud service providers to disclose electronic data in criminal investigations.
Furthermore, whenever an entity is subject to investigation by multiple authorities, the entity should, at the early stage, explore whether a coordinated or global resolution of the investigation is possible.
4. The Investigation Process
4.1 What steps should typically be included in an investigation plan?
An investigation plan should set forth clearly the scope of the investigation, in terms of geography, relevant business units, and the pertinent time period. Necessary steps include document preservation, collection, and review, which begins with the identification of relevant document custodians, and, if the review is electronic, relevant document search terms. A plan for further fact development typically includes witness interviews and, in many cases, expert analysis. The plan should also include an understanding of how and when investigative findings will be shared with the client. When cooperating with investigating authorities, it is often advisable to share the scope of the investigative plan with the authorities to ensure it meets with their satisfaction and that cooperation credit is being secured.
4.2 When should companies elicit the assistance of outside counsel or outside resources such as forensic consultants? If outside counsel is used, what criteria or credentials should one seek in retaining outside counsel?
For any matter involving activity beyond a routine response to an information request, the hiring of outside counsel is commonplace. Even where in-house legal departments are experienced with investigations involving suspected civil or criminal violations and are comfortable interfacing with government authorities, the hiring of outside counsel can serve to demonstrate that the entity is taking the issue seriously and responding sincerely. Regulators and prosecutors tend to scrutinise investigations closely in which the entity is, in effect, investigating itself.
Whether to retain additional outside consultants, including data forensics experts or subject-matter consultants, should be discussed closely with outside counsel. Any such experts should be retained by outside counsel to ensure that communications made by the experts pursuant to the investigation remain subject to any applicable privileges.
5. Confidentiality and Attorney-Client Privileges
5.1 Does your jurisdiction recognise the attorney-client, attorney work product, or any other legal privileges in the context of internal investigations? What best practices should be followed to preserve these privileges?
U.S. law does not provide for a general investigative privilege. As a result, clients and counsel need to take affirmative steps within the conduct of an investigation to establish and abide by the necessary conditions to ensure that all applicable privileges are preserved. The privileges recognised in U.S. law include the attorney-client privilege, the “common interest” or “joint defence” privileges, and the attorney work-product doctrine.
The attorney-client privilege protects communications between client and counsel wherein legal advice is sought or provided. The common interest and joint defence privileges provide for the protection of legal communications with third parties (and their attorneys), if the client and the third party share a common legal interest and the communications are made in furtherance thereof. It is important to note that these privileges protect communications, not facts. By virtue of being communicated to counsel, facts themselves do not become subject to privilege.
The attorney work-product doctrine protects materials – documents, memoranda, and analyses – prepared by attorneys in anticipation of litigation. Depending on the nature of the work product, it may be afforded a different degree of protection from discovery. “Ordinary” work product, which consists of gathered materials and facts, is accorded less protection than “opinion” work product, which contains the thoughts and analysis of counsel.
The primary purpose of the internal investigation is an important factor in determining whether the investigation is protected by privilege. U.S. courts have applied the attorney-client privilege where the primary purpose of the investigation was to obtain or provide legal advice, but not where the purpose was to provide business advice.
Applicable privileges can be waived, both explicitly and by the conduct of the holders of the privilege. To preserve privileges, privileged materials should be clearly marked and kept confidential.
5.2 Do any privileges or rules of confidentiality apply to interactions between the client and third parties engaged by outside counsel during the investigation (e.g. an accounting firm engaged to perform transaction testing or a document collection vendor)?
Communications with, and materials prepared by, experts hired by counsel are protected by the attorney-client privilege and attorney work-product doctrine, provided that such communications and materials are made in furtherance of providing legal advice to the client.
5.3 Do legal privileges apply equally whether in-house counsel or outside counsel direct the internal investigation?
U.S. privilege law applies equally to in-house and outside counsel. However, privileges asserted for communications with and materials prepared by in-house counsel may be challenged, particularly if in-house attorneys also provide business advice or other non-legal advice to employees. In such circumstances, it is important for in-house counsel to separate legal and business communications. Accordingly, including outside counsel on any investigation-related communications may provide a stronger shield against disclosure and U.S. courts have found the retention of outside counsel to be an important factor in determining whether the primary purpose of the investigation is to obtain legal advice. Additionally, internal investigations should be conducted at the direction of counsel – whether internal or external – rather than compliance officers, who are not attorneys, so that the documents relating to the investigation are protected by the attorney-client privilege.
5.4 How can entities protect privileged documents during an internal investigation conducted in your jurisdiction?
Proper identification and handling of privileged documents is critical to preserving applicable protections. Privileged documents created during the course of the investigation should be clearly marked with the applicable privilege on each page of the document. Privileged communications that pre-date the investigation should be identified and clearly marked during the document review phase of the investigation, and set aside so as to avoid inadvertent disclosure to regulators or other third parties.
Additionally, entities and their counsel should be mindful that U.S. courts have ruled that a client may waive the work product protection for materials prepared by counsel, such as interview notes and memoranda, by providing oral summaries of interviews or allowing the auditor to produce memoranda summarising the findings to government authorities like the SEC.
5.5 Do enforcement agencies in your jurisdictions keep the results of an internal investigation confidential if such results were voluntarily provided by the entity?
Some materials provided to U.S. enforcement agencies are protected from general disclosure by law, such as materials provided pursuant to a U.S. federal grand jury subpoena. But investigating authorities are typically not under a legal obligation to maintain the confidentiality of information voluntarily provided by an entity about the results of an internal investigation. Entities making disclosure of materials typically seek to limit further disclosure of such materials, including through requests for confidential treatment under the Freedom of Information Act (FOIA). However, as stated elsewhere in this chapter, entities should assume that law enforcement agencies will share information with other domestic or foreign authorities. Further, where the investigating authority is under no obligation to keep the information confidential, or the agency determines it may disclose the information consistent with its objectives – for example, detailing facts supporting an agreement that includes a penalty imposed upon the entity under investigation – the information may become public. Nonetheless, where the entity is in a cooperative posture, counsel can work with the investigating authorities to limit the scope of information disclosed.
6. Data Collection and Data Privacy Issues
6.1 What data protection laws or regulations apply to internal investigations in your jurisdiction?
Unlike some other jurisdictions, the U.S. does not have a specific data protection or data privacy regime applicable to internal investigations. Certain DOJ policies and procedures provide for the redaction or non-disclosure of sensitive personal information like social security numbers and other identifying data, but such protections are not mandated by statute.
While the U.S. does not have an equivalent to the European Union’s General Data Protection Regulation, entities producing information in the course of investigations should pay close attention to the data protection or data privacy law of the states in which they do business. Notably, the California Consumer Privacy Act (CCPA), which became effective on January 1, 2020, requires companies to make disclosures to consumers regarding the collection, use, and sharing of personal information. While the CCPA does not restrict an entity’s ability to comply with a government investigation, it may nonetheless alter data collection and retention policies for certain consumer-facing companies, and entities should make themselves aware of the manner in which data privacy statutes and the ability to comply with information requests from regulators may conflict.
6.2 Is it a common practice or a legal requirement in your jurisdiction to prepare and issue a document preservation notice to individuals who may have documents related to the issues under investigation? Who should receive such a notice? What types of documents or data should be preserved? How should the investigation be described? How should compliance with the preservation notice be recorded?
While it is not a legal requirement to preserve data unless an investigation or litigation commences or is reasonably foreseeable, entities should maintain and periodically update a written document retention policy that is accessible to all employees that clearly and thoroughly delineates under ordinary circumstances what data should be retained by the entity, for how long, and when and under what circumstances data may be deleted or destroyed. Compliance with document retention policies, including deletion policies, can be a useful safeguard against suspicions or allegations that data has been selectively deleted for nefarious purposes.
Once a litigation or investigation is foreseeable and a duty to preserve does arise, failure to preserve data can have consequences ranging from potential criminal liability for obstruction of justice to evidentiary inferences of consciousness of guilt that can significantly alter civil and criminal proceedings regarding the matters under investigation. As such, entities should issue a document preservation notice, which suspends the operation of the ordinary course document retention policy, not only when notice is given of a potential government investigation, but also whenever an internal investigation is initiated. The notice should be sent to employees, as well as third parties, who are likely to possess relevant documents and data. It should state the existence of the investigation, briefly describe the relevant subject matter so that employees can identify documents and data that must be preserved, explain the importance of data retention, and identify potential locations and categories of relevant data and documents. Entities should also send the notice to their IT departments to prevent ordinary course document destruction or overwriting of electronic media from continuing. To record compliance with the notice, the notice should provide some form of acknowledgment, often a signature affirming receipt and compliance, by each employee receiving a copy.
6.3 What factors must an entity consider when documents are located in multiple jurisdictions (e.g. bank secrecy laws, data privacy, procedural requirements, etc.)?
The overriding consideration in the investigative context is often the company’s desire to preserve the perception of compliance and cooperation with the investigating authority’s requests. The delays and difficulties that can arise from complying with the overlapping, and sometimes conflicting, data privacy regimes of foreign jurisdictions can threaten the perception that a company is providing information in a forthcoming manner. Multijurisdictional entities should have thoroughly developed standing protocols for navigating investigative requests that implicate competing disclosure and privacy regimes, should be attentive early in the investigative process to the complexities and delays that may arise, and should be aware of measures, including informed consent of employees, that can alleviate such delays. Engaging local counsel experienced in complying with non-U.S. data protection regimes may be necessary to this process.
6.4 What types of documents are generally deemed important to collect for an internal investigation by your jurisdiction’s enforcement agencies?
Which types of documents must be collected will depend on the particular facts and the matters under investigation. An entity should collect broadly and consider at the outset of collection which types of documents may have relevance to the potential issues and underlying activity. Typical examples include physical and electronic documents and communications, recorded audio communications, trade records, payment and transaction ledgers, and relevant policies and procedures. Particular attention should be given to whether, in the context of the investigation and given its specific focus, employees’ mobile devices should be collected and imaged.
6.5 What resources are typically used to collect documents during an internal investigation, and which resources are considered the most efficient?
Where large volumes of data and documents need to be collected and reviewed, an entity will often hire a third-party data vendor to identify and secure the relevant materials. Outside counsel may begin its investigative process by conducting interviews in collaboration with the vendor to better understand what categories of documents and data may exist, where they are kept, and which employees are most likely to have responsive materials.
6.6 When reviewing documents, do judicial or enforcement authorities in your jurisdiction permit the use of predictive coding techniques? What are best practices for reviewing a voluminous document collection in internal investigations?
The scope of document review and production is increasingly the product of a negotiation between the entity and the investigating authority. Typically, the entity, in collaboration with outside counsel and any outside data collection and review vendors, identifies a population of employees (“custodians”), a date range, and a set of search terms to apply to the documents possessed by that set of custodians, and seeks the approval of the investigating authority to conduct its collection according to the proposed scope. The resulting documents will be reviewed by counsel for responsiveness and any applicable privileges prior to production.
Some entities use predictive coding and other forms of technology-assisted review (“TAR”) in lieu of search terms and first-level document review. An increasing number of courts have been accepting the use of predictive coding in civil cases, and it may be particularly useful for financial institutions or other entities with large volumes of data. However, TAR has not yet been widely used to identify materials responsive to government requests and investigations.
7. Witness Interviews
7.1 What local laws or regulations apply to interviews of employees, former employees, or third parties? What authorities, if any, do entities need to consult before initiating witness interviews?
Companies need not consult with any authorities prior to initiating witness interviews in connection with an internal investigation, except in the limited circumstance discussed elsewhere in this chapter, in which as part of a cooperative investigation, an authority requests that an entity shall not interview or contact an individual until the authority has had the opportunity to interview that person.
7.2 Are employees required to cooperate with their employer’s internal investigation? When and under what circumstances may they decline to participate in a witness interview?
In the U.S., employees are often required to cooperate with internal investigations as a condition of their continued employment and declining to participate may result in dismissal.
7.3 Is an entity required to provide legal representation to witnesses prior to interviews? If so, under what circumstances must an entity provide legal representation for witnesses?
There is no statutory requirement to provide separate legal representation to employees prior to interviews, though certain key employees may negotiate indemnification for legal fees in their employment agreements and may hire counsel if they feel their interests diverge from those of the company or if they may face criminal charges. Even absent such contractual provisions, entities will often provide separate counsel for employees and pay counsel’s fees.
7.4 What are best practices for conducting witness interviews in your jurisdiction?
Witness interviews should be conducted in a manner and location that affords privacy to the witness and avoids speculation among other employees and resulting disruption to the company’s business activities. This often means interviews are conducted at the offices of outside counsel or at a separate location.
Interviews should be memorialised in writing by counsel and attended by a sufficient number of counsel so that in the unlikely event an attendee were needed to testify about what was said in the interview, a member of the legal team could do so without disqualifying the law firm or otherwise disrupting the representation. The conditions of the interview should be clearly described to, and understood by, the witness, including whether the attorney-client privilege applies to statements made therein and whether counsel represents the entity, the witness, or both. In the U.S., in an employee interview where counsel represents the entity but not the witness, the interview typically begins with a formal instruction known as an “Upjohn warning”, which clarifies that in-house or outside counsel represents the entity and not the witness, and that it will be within the entity’s discretion, and not the witness’s, whether to share the content of the interview with government authorities.
The written memorandum of the interview should not be a verbatim recitation of what was said, but rather should reflect the mental impressions of the attorneys present, so that, as set forth elsewhere in this chapter, the work-product doctrine will protect the memorandum from compelled disclosure. In addition to a description of the witness’s responses, the memorandum should reflect who was present at the interview, the approximate length of the interview, and whether the Upjohn warning was given.
7.5 What cultural factors should interviewers be aware of when conducting interviews in your jurisdiction?
Though the U.S. is likely not unique in this regard, employees may generally be wary of interviews and reluctant to interface with counsel, particularly with unfamiliar outside counsel. As a result, employee interviews are often designed to be as accommodating as possible to the witness so as to encourage the greatest candour. Such interviews are conducted in an informal, non-confrontational fashion to ease the employee’s concerns and to ensure the most thorough information-gathering possible.
7.6 When interviewing a whistleblower, how can an entity protect the interests of the company while upholding the rights of the whistleblower?
As described elsewhere in this chapter, whistleblowers are afforded certain protections under U.S. law, and companies may face civil or criminal liability for discriminating or retaliating against whistleblowers who raise concerns about company misconduct to outside authorities. However, there is nothing particular about the interview context that requires modification for the interview of a whistleblower. All employees are due respect and consideration in the investigative process, and whistleblowers are no different. Nonetheless, a routine measure that may protect the interests of both the whistleblower and the entity is the provision of separate counsel to the whistleblower at the entity’s cost, which signals to both the authorities and the whistleblower that the matter is being treated seriously and that the whistleblower’s individual rights are being respected.
7.7 Can employees in your jurisdiction request to review or revise statements they have made or are the statements closed?
Often, counsel representing employees will ask what statements their client made to the company prior to the involvement of the employee’s counsel. Such requests are routinely accommodated in one form or another, but with due attention paid to avoiding any waiver of applicable privileges or protections. However, such requests are granted as a matter of discretion, not entitlement. If a witness wishes to clarify or supplement a prior statement, such requests are typically viewed as beneficial to the truth-finding process, and are permitted, absent circumstances indicating a motive to fabricate.
7.8 Does your jurisdiction require that enforcement authorities or a witness’ legal representative be present during witness interviews for internal investigations?
Government authorities are not required to be, and are typically not, present at employee interviews during internal investigations.
If an employee is represented by separate counsel, in connection with the investigation, counsel will generally attend all interviews of the employee. Indeed, ethical rules in many jurisdictions forbid a lawyer from contacting an individual he or she knows to be represented by counsel outside the presence of said counsel, though this protection can be knowingly waived.
8. Investigation Report
8.1 How should the investigation report be structured and what topics should it address?
The structure of any investigative report may vary according to the particular facts and circumstances of the matters under investigation and the ultimate audience and purpose of the report. To the extent that the written report is for the internal use of the client, it is likely to be less formal, less structured, and less elaborate than a report intended for public access. Any report, whether public or private, should contain factual findings, legal conclusions, and recommendations for remediation, if findings of deficiency were made.