Global Investigations Review – The Practitioner’s Guide to Global Investigations

January 14, 2022 0 By administrator

14.1 Introduction

Unless required to by contract or subpoena, employees and former employees may decline to provide information or documents in connection with a corporate investigation. However, many employers will insist on employee co-operation and may impose disciplinary measures – up to and including termination – on those employees who refuse. In the absence of contractual protections, employees may have no legal right to refuse to submit to an interview, even if their answers tend to incriminate them. A 2016 decision from the United States Court of Appeals for the Second Circuit in Gilman v. Marsh & McLennan Companies, Inc is instructive. There, two employees argued that Marsh & McLennan’s demand they submit to an interview in an internal investigation constituted state action that infringed their right against self-incrimination. The court rejected this argument, calling it ‘the legal equivalent of the “Hail Mary pass” in football’.

Although employees generally cannot refuse to participate in investigations without risking their employment, they do possess various rights implicated by corporate investigations. The sources of those rights include the employer and federal and state law. With respect to the employer, many companies have policies and procedures for internal investigations. For instance, employee handbooks, company by-laws, written guidelines and employment agreements often contain provisions regarding employee data and document collection, workplace searches, communication monitoring, privacy and confidentiality. These documents may also provide guidance on an employee’s right to indemnification for legal fees expended during an investigation or related proceedings. In addition, many companies maintain written policies that protect employees from retaliation for participating in an investigation. These documents, and unwritten, established company procedures, should be considered to understand the protection afforded to employees in an investigation.

Federal and state law also govern the rights of employees involved in investigations. These rights, discussed below, can be divided into four general categories: (1) the right to be free from retaliation; (2) the right to representation; (3) the right to privacy; and (4) the right to indemnification.

14.2 The right to be free from retaliation

Although employees generally have no right to refuse to participate in a corporate investigation, they may be protected from retaliation. A number of federal employment statutes prohibit retaliation against employees who participate in corporate investigations. State and local laws provide similar protection.

Moreover, employees who possess information regarding corporate misconduct have some leverage in that they may become whistleblowers. Whistleblowers are protected from retaliation under federal and state whistleblower laws.

The Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) provides for both civil and criminal penalties…

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