On September 9, 2015, then U.S. Deputy Attorney General Sally Quillian Yates issued a memo, “Individual Accountability for Corporate Wrongdoing,” that sent shivers down the spines of those in the workplace safety community. The essence of that memo was that for an employer to obtain relief during a criminal prosecution, it had to “cooperate completely” in holding individuals accountable. On September 15, 2022, U.S. Deputy Attorney General Lisa Monaco issued a memo—“Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group”—to clarify the Yates memo with regard to “what constitutes cooperation by a corporation.”
The Monaco memo expands upon the Yates memo and offers much greater detail about what will be required of a corporation to secure credit for cooperating with the government—both in terms of behaviors before an investigation and behaviors during an investigation. (The Monaco memo also announces additional revisions to the U.S. Department of Justice’s [DOJ] existing corporate criminal enforcement policies and practices. The Monaco memo specifically cites to an October 28, 2021, memorandum, titled, “Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies,” which rescinded prior guidance allowing companies to receive full cooperation credit in exchange for providing relevant, non-privileged information on individuals “substantially involved” in the misconduct.) To secure credit for cooperating under the Yates memo, an employer had to:
completely disclose to the Department all relevant facts about individual misconduct. Companies cannot pick and choose what facts to disclose. That is, to be eligible for any credit for cooperation, the company must identify all individuals involved in or responsible for the misconduct at issue, regardless of their position, status or seniority, and provide to the Department all facts relating to that misconduct. … The extent of that cooperation credit will depend on all the various factors that have traditionally applied in making this assessment (e.g., the timeliness of the cooperation, the diligence, thoroughness, and speed of the internal investigation, the proactive nature of the cooperation, etc.).”
Under the recently issued revisions, for a corporation to secure cooperation credit, a corporation must:
disclose to the Department all relevant, non-privileged facts about individual misconduct. … The mere disclosure of records, however, is not enough. … [I]t is imperative that Department prosecutors gain access to all relevant, non-privileged facts about individual misconduct swiftly and without delay. (Emphasis added.) … [C]orporations must produce on a timely basis all relevant, non-privileged facts and evidence about individual misconduct such that prosecutors have the opportunity to effectively investigate and seek criminal charges against culpable individuals. (Emphasis in original.) Companies that identify significant facts but delay their disclosure will place in jeopardy their eligibility for cooperation credit. Companies seeking cooperation credit ultimately bear the burden of ensuring that documents are produced in a timely manner to prosecutors. (Emphasis added.)
Going forward, in connection with every corporate resolution, Department prosecutors must specifically assess whether the corporation provided cooperation in a timely fashion. Prosecutors will consider, for example, whether a company promptly notified prosecutors of particularly relevant information once it was discovered, or if the company instead delayed disclosure in a manner that inhibited the government’s investigation. Where prosecutors identify undue or intentional delay in the production of information or documents—particularly with respect to documents that impact the government’s ability to assess individual culpability—cooperation credit will be reduced or eliminated. (Emphasis added.)
Thus, whereas until now a corporation could provide relevant, non-privileged information regarding individuals who were substantially involved, the Monaco memo requires that the corporation turn over information about everyone potentially connected to the alleged misconduct. The impact this could have on corporations is that now their more frontline managers, as well as C-suite officials, could be implicated in corporations’ voluntary self-disclosures of misconduct, subjecting both individuals and companies to criminal prosecution. The new guidance also places a heavy emphasis on producing “relevant, non-privileged facts about individual misconduct swiftly and without delay” to meet the timeliness requirement.
The DOJ’s Environment and Natural Resources Division (ENRD) works with personnel at the Occupational Safety and Health Administration (OSHA) and the Mine Safety and Health Administration (MSHA) to investigate and prosecute criminal violations of the Occupational Safety and Health Act (OSH Act) and the Federal Mine Safety and Health Act of 1977 (Mine Act). While there is a common perception that criminal violations under the OSH Act and the Mine Act are limited to misdemeanor criminal liability, there are a host of criminal violations that can be prosecuted under either.
In addition, there are a host of environmental laws that create criminal liability for violations.
While it has always been important for employers to carefully consider how they handle an OSHA or MSHA inspection, particularly those that relate to a workplace death, injury to a young worker, or some sort of environmental harm, these inspections are increasingly a risk for criminal prosecution.
Ogletree Deakins’ Workplace Safety and Health Practice Group will continue to monitor and report on developments with respect to enforcement issues and will post updates on the firm’s Workplace Safety and Health blog as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.