FCPA Compliance and Ethics Blog

January 17, 2011

Internal Investigations – Initial Assessments: Employee Interviews

Ed. Note-today we host a Guest Blog from our colleague Mary Shaddock Jones, Assistant General Counsel and Director Of Compliance at Global Industries, Ltd.

Most internal investigations begin with that “aha moment”. That moment when some comment or tip or document leads you to believe that there may be more to the story. It is your job as in-house counsel or as the compliance officer to obtain enough facts so that (a) any improper action, if discovered, can be stopped and (b) executive management can make an informed decision on what type of an investigation, if any, is required. In order to obtain the “rest of the story”, you will need to gather enough facts and/or documents to formulate the initial assessment as to the credibility of the “tip”. What do you do? How do you do it?

First of all, it is best to have the investigation performed under the direction of an attorney so that the company will have the ability to protect the investigation and its results through the application of the attorney-client privilege and the attorney-client/work-product doctrine. In selecting counsel, the choices are between a company’s in-house counsel (assuming it has inside counsel) and outside counsel. If the initial “tip” indicates that the matter potentially involves a very serious legal matter which will require disclosure to an external governmental entity (such as the DOJ and SEC), then it is probably best to obtain the assistance of outside counsel before any interviews take place so that there can be no question of impartiality on the part of the company from the beginning. However, if the matter is one which appears to be minor, then the initial assessment can be carried out by in-house counsel.

In either event, it is critical that the attorneys performing the interviews clearly inform the persons being interviewed that they represent the company and not the individual. The “Upjohn warnings” should be given before the interview begins and should contain statements informing the witness that the interview is subject to the company’s attorney-client privilege; the privilege belongs only to the company and not to the witness; it is up to the company alone to decide whether and when the interview should be disclosed to third parties; therefore, it is considered to be confidential and that the company can make the decision without the consent of the witness. Finally, the witness should be told that they may not disclose the questions asked or the answers given to any third party so as to protect the privilege.

Once the witness understands and, assuming they agree to continue the interview, the purpose of the interview is to determine the facts in a professional manner, i.e. with integrity, fairness and diligence. If the initial “tip” that led to the “aha moment” leads you to believe that improper conduct is about to occur or is in the process of occurring, then you would want to start talking to witnesses as quickly as possible in order to stop the improper conduct. However, if the improper conduct appears to have occurred in the past, then it has been my experience that it is better to review any physical documents and e-data (i.e. emails) before you begin any interviews. Document review and analysis is a crucial part of an investigation and is often more revealing than witness interviews. Reviewing accessible documents and/or emails in advance of an interview often allows you to understand the “bigger picture” as to what is happening in a particular area or on a particular job that may have led to the tip before you start talking to witnesses. If you are interviewing employees, you may have the ability to interview them on more than one occasion. But if you only get one interview- then you want to be as prepared as possible. If you have performed some level of investigation through email and or physical documents- you can bring those with you as part of the investigation.

One final comment. Don’t jump to conclusions one way or the other before you interview your fellow employees. There are usually two sides to every story. It is your job in making the initial assessment as to the credibility of the tip to obtain all of the relevant facts. You do that by looking at emails, documents and interviewing witnesses. Only after having done all of the above are you able to fully present an objective and verifiable opinion to your company’s management so that the future direction of any investigation can be decided upon.

Mary Shaddock Jones is Assistant General Counsel and Dir. Of Compliance at Global Industries, Ltd. Mary can be reached at maryj@globalind.com. The views and opinions expressed here are her own and not necessarily those of her employer.

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