Out of Sight, Not out of Mind: Prosecutors Won’t Overlook Remote Wrongdoing in COVID-19 Times
With many employees working remotely during the COVID-19 pandemic due to government-mandated office closures and workplace safety concerns, in-house attorneys are facing a multitude of unprecedented challenges. Among them are the difficulties of being unable to observe and interact with employees in person. There is a potential that remote working and the current economic challenges faced by businesses and their employees may lead to an increase in corporate malfeasance or misconduct by employees that could be attributed to the company. Two things are certain even during these challenging times: (1) corporate and/or employee wrongdoing will not stop; and (2) the Department of Justice (DOJ) and state prosecutors will be even more alert for and will continue to investigate wrongdoing.
Below are some suggestions for in-house counsel to consider to help prevent or detect malfeasance and position themselves to be prepared if and when their company faces a government inquiry.
Implement and update internal procedures
Whether a company has adequate internal procedures to detect or prevent wrongdoing is a key factor prosecutors and regulators will focus on during a criminal investigation or other enforcement action, particularly in an era of remote work arrangements. If an organization does not have internal compliance controls in place to address and discourage potential misconduct, such as integrity hotlines, these should be developed and adopted as soon as possible. Even companies that have a comprehensive compliance program should review and update the program, especially to address the additional risks and pitfalls that may arise from the remote working environment. After businesses reopen, companies should be sure to add any updated procedures developed during the COVID-19 pandemic to their policies, including disaster management plans, so they are prepared for the next crisis.
Communicate with employees
A vital part of operating a remote workforce is maintaining open lines of communication—even to the point of overcommunicating—not only to prevent employees from feeling isolated, but to also encourage them to remain productive and to continue to be vigilant for security or compliance issues that may arise in the remote work setting. It would also be useful to remind employees of their continuing duty to report any information they may obtain regarding potential malfeasance. Maintaining a strong corporate culture requires transparent communication from an organization’s top leaders. In addition to deterring wrongdoing, many employees will appreciate working for a company with strong values. In-house attorneys should remind staff that all policies and procedures remain in effect even when they are working remotely. Frequent communication with employees is also a way of bringing the “office” and the values of the company into the employee’s home, which is another strong reminder that all the rules are still in place, even during remote working. In other words, adequate communication can help deter any impression that management is taking a laissez-faire attitude towards compliance and ethics.
Conduct internal investigations virtually
Conducting an internal investigation when a company becomes aware of potential misconduct is crucial for two main reasons. First, it is important for a company to understand what led to the alleged misconduct and take immediate steps to fix the problem and prevent similar issues in the future. Second, when deciding how to resolve a case, the DOJ and other governmental agencies place a strong emphasis on whether the company conducted an internal investigation, the findings of that investigation, and the remedial measures that were implemented as a result of the investigation. Therefore, a company that has conducted an internal investigation will be better positioned to deal with prosecutors and regulators.
It is unlikely that working conditions will be returning to a pre-COVID-19 “normal” any time soon. Therefore, when a company discovers that something is amiss, it should conduct any internal investigations virtually rather than waiting for business to return to “normal.” In-house counsel should also move away from the mindset that the only way to conduct investigations is in person. The preference for in-person investigations is understandable and remains the best option. But, waiting for weeks or months to conduct an investigation may further exacerbate the underlying issues that gave rise to the misconduct or problems. Such delay could put the company at a disadvantage if government authorities get involved. As most of us have experienced in recent weeks, advances in technology have made it easier to conduct virtual meetings and should be used to conduct virtual internal investigations. Documents, including emails and chats, can be collected, reviewed, and shared remotely. Likewise, interviews can be conducted via videoconference on a secure platform. While virtual interviews may be a little slower, with experienced counsel and the proper technology, virtual internal investigations can be effective. One key consideration is only using virtual technology that provides adequate cybersecurity protections to ensure that confidentiality, including attorney-client privilege, is maintained.
It is critical for companies to have updated compliance programs that address remote working conditions to help mitigate wrongdoing. Similarly, waiting to conduct an internal investigation until your company is back in the office could be a mistake because of the uncertainty surrounding how long government restrictions will remain in effect. A delay of many months, or even weeks, could allow small problems to grow into bigger problems. Memories also fade the longer a problem is not investigated. One should not assume that prosecutors, who are also working remotely, will show much leniency if in-house attorneys neglect to address known issues in any environment. Being proactive now can position your company to be ready if law enforcement shows up in your company’s lobby after businesses reopen.
“Out of Sight, Not out of Mind: Prosecutors Won’t Overlook Remote Wrongdoing in COVID-19 Times,” by Inbal P. Garrity and Rither Alabre, was published in Corporate Counsel on April 23, 2020. Reprinted with permission.
“In-House Counsel: Prosecutors Won't Overlook Remote Wrongdoing in COVID-19 Times,” by Inbal P. Garrity and Rither Alabre, was published with the same content at Law.com’s Insurance Coverage Law Center on May 3, 2020.