Best Practices in Conducting Internal Investigations

1. Best Practices in Conducting Internal Investigations UT – Batelle Labor & Employment Training August 15, 2019 Gail D. Zirkelbach

2. How an Investigation Arises • Hotline calls • Whistleblower complaints • Complaints to HR • Routine audits • Media reports • Other sources

3. Step 1– Developing an Investigation Plan • Scope the Issue • What is the nature of the issue? • Should attorneys be involved at the outset? • What documents and/or data need to be reviewed • Who needs to be interviewed • Are there other actions, reviews or tests to conduct • Establish an investigation team and file

4. Developing an Investigation Plan • “Plans are worthless, but planning is everything.” • - Dwight D. Eisenhower

5. Privileged vs. Non-privileged Investigation • Non-privileged Investigation • Fact gathering of who, what, when, where • Privileged Investigation • Also assesses the why • Attorney-Client or Attorney Work Product privilege • Prevents (?) subsequent disclosure of conclusions • Facts are not privileged • At the direction of legal counsel • Can change during investigation

6. Privileged vs. Non-privileged Investigation • Involve Legal when allegations or preliminary facts appear likely lead to litigation or significant company liability: • Unlawful employment practices (i.e. harassment, discrimination, retaliation, blatant violations of the FMLA, ADA, etc.) • Criminal fraud, conflict of interest, bribery, etc. • False Claims Act or other whistleblower actions • Environmental, health, exposure or security incidents • Incidents involving fines, penalties or reduced award fee

7. Privileged vs. Non-privileged investigation • Also involve Legal when the investigation appears to require a legal conclusion • Harassment, retaliation, hostile work environment • Negligence vs. recklessness • Knowledgeor willful misconduct • Fraudulent behavior

8. The Attorney Client Privilege • Attorney client privilege protects confidential communications between a client and its attorneys made for the purpose of giving or receiving legal advice or assistance. • “the oldest of the privileges for confidential communications known to the common law.”Upjohn Co v. United States, 449 U.S. 383,389 (1981).

9. The Attorney Work Product Doctrine • The attorney work-product doctrine protects materials prepared in “anticipation of litigation”. • Litigation broadly defined • Includes work product materials prepared by attorneys, and materials prepared by the client and by third parties at an attorney’s direction. • Active direction

10. Maintaining Privilege During an Investigation • Performed by attorneys • Performed by non-attorneys at the direction of attorney(s) • Should document • Must be active direction • Be careful in foreign jurisdictions • - Not always privilege for in-house counsel

11. Step 2– Collecting the Document • Collect and review relevant documents • Written reports or complaints • Applicable regulations or internal policies • Correspondence (including email) about the issue • How obtain access • Relevant records • Ask witnesses for additional documents during interviews

12. Document Preservation Obligations • Duty to preserve documents when: • Notice of, or reasonable anticipation of, litigation/government investigation • Subpoenas/CIDs • Other circumstances might be more fact-specific • Whistleblower complaint • Complaint from a business partner • Informal request from a prosecuting agency or inspector general • If intending to claiming work productprotection

13. Document Preservation Obligations • Scope: Obligation to identify, locate, and maintain information that is relevant to reasonably anticipated litigation/government investigation • Which custodians? • Standards: reasonableness and good faith preservation efforts • Electronic data • Balance against: disruption of business operations, expense, other burdens • Best practice to err on side of preservation

14. Document Preservation Obligations • Potential consequences of failure to preserve: • Sanctions vary and depend on Court’s view of degree of wrong doing • Monetary remedies against the defendant • Attorneys fees and costs associated with discovery disputes • Civil remedies • Evidentiary remedies (e.g., jury instructions concerning adverse inferences) • Independent tort claims for spoliation • Possible criminal penalties (obstruction of justice)

15. Step 3 – Witness Interviews • Who to interview • Complainant(s) • Subject(s) of the complaint • Supervisor(s) of complainant(s) and subject(s) • Those with the opportunity to have observed actions underlying the complaint • Those with documents potentially relevant to the complaint • Sequencing of interviews • Noticing of interviews

16. Witness Interviews – Use of Documents • Benefits of using documents • Selecting the documents to use • Understand the purpose of the interview • Establish the relevant universe of documents for the witness • If there are no documents • “Personal” vs. “general” documents • How many documents to use • Importance ofcommunication within interview team

17. Witness Interviews – The Outline • Purpose of the interview outline • Key elements of the interview outline • Introduction/Upjohn warning • Background questions • General (non-document) questions • Documents • Assume the interviewer knows something ( . . . but not a lot) • Integrating documents into the outline

18. Witness Interviews -- The Upjohn Warning • Essential to maintain privilege • Advise witness at onset of interview • Everything said is confidential • Should not discuss with anyone • As facts are not privileged, can discuss facts • Represent the company, not the individual • Company could choose to waive privilege • Document that warning was provided and acknowledged • Must provide completely to be effective • Mark all interview notes with ACP legend

19. Conducting the Interview • Establish rapport with witness • Begin with open ended questions – who, what, when, where • Follow up with specific questions • Repeat questions when answer is not responsive • Use documents to refresh recollections • Verify dates, names of individuals mentioned, documents referenced, other specifics • Do not be afraid to deviate from outline

20. Conducting the Interview (cont.) • End with omnibus questions: • Is there anything else we should know? • Do you have any other concerns? • Are there others we should talk to? • Do you have/know of other relevant documents? • Remind of privilege if appropriate

21. Conducting the Interview (cont.) • Take contemporaneous notes • If not ACP, record facts only, not opinions, impressions or credibility assessments • If ACP, record indicia of credibility: • Body language/eye contact • Demeanor/whether appeared flustered • Consistency of statements • Potential motive(s) and corroboration

22. Witness Interview Best Practices • Determine whether to put the witness at ease (or not) • Listen to cues from the witness • Listening to the witness’ responses and follow up • Flag areas for future follow-up if necessary • Be prepared to answer questions • Maintain the appropriate demeanor

23. Step 4 – Concluding the Investigation • Always maintain an investigation file • Include all relevant documents and witness interview memos • Determine whether to prepare an Investigation Report • Determine whether HR actions are warranted • Determine whether corrective actions are advisable • Determine whether any disclosures are required

24. Investigation Report • Should there be a report? • Advantages • Disadvantages • Competing interests of privilege and transparency • Purpose = to provide legal advice/analysis • Limit distribution of privileged report • Development of sanitized “facts only” secondary report • Oral report

25. HR Action • Follow all internal procedures and requirements • Document basis for action • Document that occurred • Could be important for disclosure purposes

26. Corrective Actions • Changes to internal procedures and requirements to prevent or deter recurrence • Additional training • Consider structural changes • Will be important for disclosure purposes

27. Disclosure Obligations • Certain laws and regulations trigger reporting and disclosure requirements, including: • Contractor Code of Business Ethics & Conduct Clause (FAR 52.203-13) • FAR Mandatory Disclosure Rule • Additional reporting requirements in contracts and applicable clauses • Disclose what happened, responses taken and explanation as to why will not occur again

28. “In the midst of chaos, there is also opportunity” • –Sun Tzu, The Art of War

29. Questions?