Kaiser Permanente and California Minority Counsel ProgramJanuary CLE Marathon Panel Presentation: Internal Investigations From Employment to White Collar Jose Sanchez, Jessica Puathasnanon, Troy Valdez, Jennifer Goldberg, Panelists Moderated by Robert Spagat
Purposes & Goals of Corporate Investigations • Satisfy legal obligations to investigate wrongdoing • Enable the corporation to respond appropriately to charges of wrongdoing • Ensure fiduciary obligations are met • Avoid or mitigate against prosecution or lawsuits • Create a basis for legal defenses to charges of wrongdoing • Protect the corporation’s reputation • Prevent loss to company, employees, or shareholders
Corporate Investigations: Overview of Ethical Issues • Who is the client? • Defining the relationship with employees interviewed in the investigation • Dealing with whistleblowers • When is joint representation of affected constituents within the client appropriate? • When and to whom should the attorney report violations discovered in the investigation? • Who holds attorney client privilege and when can/should privilege be waived? • What can/must an attorney do when s/he discovers evidence of client misconduct during the investigation?
Who is the Client • Whom does the lawyer represent? • Cal. RPC, Rule 3-600 (Attachment A) • Who speaks for the client/to whom does the investigating attorney report? • Are there conflicts between constituents within the client?
Defining the Relationship with Interviewed Employees • Upjohn warnings • “Does someone think I did something wrong?” • “Do I need a lawyer?” • “Will you represent me if necessary?” • “If I hire a lawyer, will the company pay for it?” • “Can I have my own lawyer present for this interview?” • “Are our conversations privileged?” • “Are you neutral?” • Dealing with an employee’s reluctance to cooperate
Dealing with Whistleblowers • Protections for Whistleblowers • Negotiating with Whistleblowers • Managing employee Whistleblowers
Joint Representation of Client Constituents • Representation with informed written consent • See Cal. RPC, Rule 3-310 • See Cal. RPC, Rule 3-600(E) • Advantages of joint representation • Risks of joint representation • SEC Whistleblower Program and associated conflicts of interest • Key considerations • Whether and what kind of confidential information will be shared • Who will control privilege • How privilege will apply if a dispute arises between the clients • Whether the lawyer will continue to represent the corporation if a conflict develops
Attorney Client Privilege • Steps to take at beginning of investigation to assert privilege • When to waive privilege • To establish cooperation in government investigations • To establish legal obligation met when investigation is required • As a defense to civil claims and criminal prosecutions • “Limited” waiver of privilege?
Dealing with Misconduct by Client Constituents • Duty to further investigate suspected misconduct? • Reporting to client • Reporting up corporate chain of command • See 17 CFR Part 205 • See Cal. RPC, Rule 3-600(B) • See 15 U.S.C.A. § 78j-1 (governing accounting firms)
Dealing with Misconduct by Client • Reporting out • When permitted? • When advisable? • See Cal. RPC, Rule 3-100 • See 15 U.S.C.A. § 78j-1 (governing accounting firms) • Resigning • When required? • See Cal. RPC, Rule 3-600(C) • See 15 U.S.C.A. § 78j-1 (governing accounting firms)