August 13, 2024
Few things in a person’s career can come as more of a shock to the system than an internal investigation in the workplace. Years of schooling and even decades of experience on the job can provide a person with the skills to do their job effectively but often do nothing to prepare them to meet the typically sudden and confusing dynamics of an internal investigation.
There are many purposes of an internal investigation, but commonly a primary goal of such an investigation is for a company or other organization (including government, charitable, and religious organizations) to quickly gather as much information as possible regarding potential wrongdoing within its ranks in order to effectively move forward in either taking corrective action and/or helping to avoid further negative consequences in the form of a government enforcement action and/or loss of public and shareholder trust. By doing so, the company can, among other things, take preemptive action by bringing their findings to the attention of government regulators and/or shareholders and/or be in a better position to respond to government intervention if and when it does occur.
Typically, internal investigations are conducted or at least overseen by attorneys (whether inside or outside counsel to the company), as internal investigation attorneys are skilled at conducting such investigations, and their communications with employees and management are protected by attorney-client privilege.
This is, of course, all well and good for the organization conducting the internal investigation, but what does this mean for an employee or executive whose actions are being scrutinized as part of the investigation? Does such a person need their own attorney during an internal investigation? There is not a clear “one size fits all” answer to that question, but it is worth at least exploring the option to best protect one’s interests.
The Company’s Interests v. an Individual’s Interests
One of the key principles to always keep in mind in the context of an internal investigation is that the investigation is being done to protect the interests of the organization conducting the investigation, and not those of the individuals within the organization under scrutiny. In a typical investigation, the purpose of the investigation is to identify whether or not wrongdoing occurred, and, if so, who is responsible, whether as a primary violator, an enabler of violations, or someone who had oversight of the violator and did not effectively address or prevent such violations.
As one example, if the Securities and Exchange Commission (SEC) notices unusual trading in Company A’s stock before the announcement of a major event by Company A increasing the value of the stock (e.g. an acquisition) or decreasing the value (a missed earnings report), Company A might conduct an internal investigation into insider trading among its employees. The investigation attorneys for Company A are there to protect Company A’s interests, not those of any employees engaged in insider trading. Should the investigation result in findings of insider trading by an employee, Company A’s attorneys might well advise Company A to fire the employee and report the findings regarding the employee’s illegal insider trading to the SEC. By doing so, Company A can show the government (and shareholders and perhaps the public) that it does not tolerate illegal conduct and takes effective action to deter it. Although this is damaging to the employee’s interests, remember the company’s attorneys are there to represent the company’s interests, not the employees.
This can be confusing and even jarring to an employee meeting with their company’s internal investigators, as there can be a false assumption that a lawyer representing the company (as compared to a government investigator) is somehow aligned with the employee themselves and represents their interests. This is particularly true when an effective internal investigator (as they often do) has a friendly, non-adversarial demeanor with the employee, which can often cause an employee to let down their guard. Even where such investigators clearly explain that they represent the company’s interests and not those of the employee, an employee might hurt their own legal interests in their attempts to appear helpful, forthcoming, and cooperative.
The Unexpected Consequences of an Internal Investigation
The aforementioned characteristics of being helpful, forthcoming, and cooperative are typically associated with performing well on the job, and so an employee subject to an internal investigation may want to go out of their way to show those qualities, especially if they feel like they need to compensate for some perhaps questionable behavior or simply to save their job.
Keeping one’s employment is certainly an outcome to be mindful of in an internal investigation, but it is important to be aware of other, perhaps unexpected, outcomes as well. Providing information to an internal investigator that leads to the discovery of a criminal act (e.g., paying bribes to government officials in order to do business in a foreign country) could lead to that information being provided to civil and criminal authorities by the company if the company feels it is in best interests to do so (remembering that the company’s investigators and attorneys are working on behalf of the company’s interests and not yours). Damaging information you provide to investigators might also be shared with shareholders and/or the public in a manner that impairs your career and other aspects of your life.
Thus, while your continued employment might well depend on whether and how you cooperate with an internal investigation, your career and freedom might also be impacted by whether you choose to cooperate with investigators, and exactly how you do that.
Working With Your Own Attorney in an Internal Investigation
For the reasons set forth above, if you have reason to be cautious of a pending or current internal investigation, it is wise to at least consult with an experienced internal investigations attorney to discuss your situation and how best to approach it. Your own attorney will represent your interests and yours alone, and can advise you on best approaches to dealing with the investigation – including whether to agree to an interview with the investigators, whether your lawyer should be present, how best to prepare for interviews and other investigative steps (i.e. examination of laptops, phones, etc.), and other issues pertinent to your interests.
In some cases, it may be better for your attorney to advise you without being present or even known in the investigation process, whereas, in others, it might be better for your attorney to be present and advocating on your behalf throughout the investigation. By speaking with an experienced internal investigation attorney committed to working on behalf of your interests alone, you can navigate the complex process of an internal investigation without having to do it alone.
Contact a Seasoned Internal Investigations Attorney
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