Let’s say you’re the CEO of Fortunato Pharmaceuticals, a multi-billion-dollar company that’s been owned and operated by your family for generations. Your kids all lead their own, individual subsidiaries that you funded after they presented you with what was, in your judgment, a viable business concept and plan. The government is investigating the parent company because of a number of complaints about your biggest product, and the lead investigator advises you he has a source within the company who has been providing him with trade secrets and other proprietary information and who will testify as a witness during the prosecution of the company for a number of crimes. Do you:
- A. Offer a $50,000,000 reward to whichever of your children identifies the whistleblower.
- B. Instruct your shadowy, gravel-voiced, in-house counsel and general fixer of loose ends (played brilliantly by Mark Hamill, by the way) to hide or destroy evidence.
- C. Kill your COO sister and stow her—Egyptian-mummy-like—in the basement of your childhood home to try to moot your deal with the devil.
- D. All of the above.
- E. None of the above.
In the limited series Fall of the House of Usher, which is very loosely based on the story of the same name by Edgar Allan Poe, main character Roderick Usher chooses D. That’s obviously the wrong answer, but the tactics implemented by Fortunato Pharmaceuticals provide an absurd mirror image of the right way to handle things if the Department of Labor, the Occupational Safety and Health Administration (OSHA), the Equal Employment Opportunity Commission (EEOC), or another government agency comes tapping at your chamber door.
More often than not, an agency will have sent an information request or otherwise have put an employer on notice before showing up on-site and generally won’t do so unannounced. Whether the company has received an advance request or an uninvited guest, the company should immediately call legal counsel who will be able to advise based on the specifics of the situation. Additionally, the company generally can and should negotiate arrangements for an on-site inspection, particularly if key personnel aren’t available at the requested time. Overall, an employer has a much better chance of avoiding the pit and the pendulum if it takes a cooperative approach.
So if the investigator or auditor requests that the company provide documentation, after carefully examining the request (which should be in writing), the company should provide what documents it has in a useful format and explain why any unavailable documents either don’t exist or are practically impossible to provide. If documents are literally or essentially unavailable and the employer is otherwise cooperative, suggesting a narrower scope to the document request can be successful. If the investigator requests witness interviews, it’s generally in the company’s interest to assist with determining the individuals to be interviewed and setting up the meetings if possible. If the investigator wants to select employees at random and contact them without the employer’s involvement, the company should let employees know they may be contacted and offer to provide guidance at the employees’ option.
It’s also worth noting that the federal government and many states have laws in place that protect whistleblowers from retaliation by their employers, and expending resources to identify a whistleblower will undoubtedly be seen as retaliatory. If the company is concerned about past or ongoing disclosure of trade secrets or other proprietary or nonpublic information, it’s best to discuss the matter with the investigator and attempt to reach an agreement on the handling of such information. Internally, the company may—and should—affirm that reasonable measures used to protect trade secrets and other confidential information are in place and being observed. In light of whistleblower protections, however, the company should carefully evaluate any action it’s considering in the event a breach is uncovered.
A government agent in your workplace can feel about as welcome as the Grim Reaper at a masked ball. But if the investigation is handled well, the agency may darken your door nevermore!
Becky L. Kalas is a partner at FordHarrison.
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