Companies, Employees Increasingly Becoming Targets of Government Investigations

Posted by Charles Middleton on 03/27/2015

: I understand it's not a question of if, but when, a company or its employees will be the subject of some form of government investigation. In what situations do governmental investigations arise?

A: They're most prevalent in highly regulated industries, like health care, financial services and, more recently, the oil and gas industry. They also originate from a wide variety of government agencies, from the Department of Justice to specific agencies like the Environmental Protection Agency and the Consumer Financial Protection Bureau, to state agencies which may have delegated and/or overlapping jurisdiction. Investigations also begin in a lot of different ways, including whistle-blower tips and complaints, data analytics (e.g. comparing a health care provider's billing metrics to other similarly situated providers), company regulatory filings and investigative journalism.

Q: What policies should companies have in place to protect themselves and employees?

A: A well-developed, risk-based compliance program should not only help prevent violations in the first place, it also should help position the company to both respond to any investigation and mitigate any potential penalties should a violation occur. Companies also should ensure that their employees are trained on these compliance policies, and that the policies are periodically updated and audited to ensure they work and are keeping up with the applicable regulations.

Q: What rights do organizations and employees have when approached by government investigators?

A: It depends on the situation. For instance, health care providers often have obligations to cooperate with the government that arise from their provider contracts. Other companies don't have these same obligations. The government also uses subpoenas, Civil Investigative Demands, and even search warrants, all of which raise a host of different issues and require a different response. At a minimum, a company should have the equivalent of an emergency response plan that involves in-house or outside counsel at the first sign of trouble. Employees also should be trained on their rights, for example their right to choose whether they participate in an interview and their right to consult with a lawyer (in-house or private counsel) in making that decision. These minimum steps should help the company and employees at least understand the nature of the investigation early on and help map out an effective response strategy.


published The Oklahoman, March 27, 2015