Get it Right: Best Practices for Responding to Whistleblower Reports of Wrongdoing

The importance of prompt and effective investigations of employee reports of wrongdoing has never been higher. Dodd-Frank and its changes to Sarbanes-Oxley have yielded a large increase in the number of reports—with much higher stakes. The continuing trend of the U.S. Supreme Court’s employee-friendly retaliation standards promises an increase in this already-growing body of charges and litigation, even when the underlying subject of the complaint or report lacks merit. Employment discrimination and other class actions, which a spate of internal complaints can signal, are on the rise.

Each investigation must be evaluated and planned carefully at the outset, and there should not be a cookie-cutter approach to these unique issues. That said, there are essential elements of any effective investigation and options that must be evaluated in each case, and the following are features or decisions to consider in every best-practice investigation. In every case, regardless of whether the company determines that each step needs to be done in that particular instance, it is critical that the decision whether or not to take any given step has been made thoughtfully and thoroughly:

• Determine and Implement Necessary Steps to Avoid Harm Upon Receipt of Complaint or Report
• Determine and Implement Necessary Steps to Preserve Information
• Select the Best Investigator—In-House, Outside Counsel, or other Consultant(s)
• Review all Relevant Personnel and Subject Matter Files
• Review Policies and Other Relevant Documents, Including the Reported Incident, and Visit Scene, if Applicable
• Determine the Initial List of Interviews, the Order of Interviews, Whether and How to Memorialize Them, and Conduct Interviews
• Consider Whether to Obtain Written Statements
• Determine Position on Presence of Counsel, Witness for Interviewees
• Maintain the Option to Assert Privilege and Work-Product Protections
• Prepare Final Report in Appropriate Form for Appropriate Recipients
• Determine and Take Appropriate Corrective Action, if Necessary
• Close the Loop with the Complainant
• Follow-up and Monitor Corrective Measures and Complainant Treatment
• Evaluate Efficacy of  Policies, Practices, and Procedures in Light of Investigation and Recommend Appropriate Changes