Top 5 Actions to Master Before the Government Comes Knocking
Government inspections, raids and investigations are prevalent in today's business world. These government actions can be based on local, state or federal criminal or civil laws or regulations. Sometimes the company can be the focus or target of the investigation. Sometimes a particular organization within the company can be the focus, or even an individual or a specific group of employees can be targeted. Companies might also be sent third-party subpoenas or requests for documents or information, which require a timely, appropriate response.
The time to consider your response to a government inspection or investigation is before they are knocking on your door. You may be required to provide numerous documents or information in a short timeframe, and likely there will be many questions of you by not only the government, but also those inside and outside your organization.
Things to consider before you find yourself talking to a government investigator or agent include: Is your data kept on hard drives, in a cloud, off-site or on premises? Are key company data and records kept electronically or in hard copy? If the government takes originals of your records, can your business continue to operate without the records? Can you ask the government to take copies of documents and leave the originals on site? If your data is off-site or stored by a third-party, does that company have protocols in place for government inspections or raids? Do you have a media response plan? Are you prepared to answer employee questions? Are you prepared to handle investor concerns? Do you know how your team will respond?
Is your company prepared to address all the questions above? The five actions outlined in this article are a good place to start in becoming more prepared in the event the government knocks on your company’s door.
(1) Write The Plan. Be sure you have a written preparedness plan and protocol in place.
Many times, the first instance a company learns it is the focus of a government investigation is when government inspectors or agents appear unannounced at a company headquarters, branch, sales office or manufacturing site. In many cases, the government representative may already have in hand a search warrant or subpoena issued by a court. For example, the inspectors or agents many be ready to take documents, records, samples or electronic data with them when they leave. They may want to talk to or interview employees or inspect certain books and records or building areas the day they arrive.
Having a written preparedness plan or protocol in place is essential. With such a plan in place, employees from the reception desk, to the plant manager, to the executive offices will know what to do and who to call. Government inspectors or agents typically are not willing to sit and wait or to come back another day. A plan helps company personnel figure out how to respond to the government’s requests.
(2) Know The Plan. Be sure appropriate employees know the plan and protocol.
Having a protocol is step one, but training appropriate employees on implementing the plan is equally important. Government investigations are not an everyday occurrence, so refreshing training for current employees and retraining new employees on a regular basis is also very important. It can be helpful to practice implementation of the protocol through a mock inspection, which can also identify any gaps in the protocol. Legal counsel can advise the company on protocol development, training and implementation.
(3) Understand Your Rights. Be sure employees and management know their rights and responsibilities in a government inspection or interview.
Typically, once an inspection or investigation is made known to the company, government inspectors or agents will agree to schedule interviews with employees and management through legal counsel. However, the government may also seek to interview employees by contacting them directly at the office or even at home – after hours or on weekends.
An employee caught by surprise at home by government agents at the front door – or just before sitting down to dinner with the family – is put in a difficult situation. It may be appropriate to work with legal counsel to educate employees in advance about their rights and responsibilities in this situation.
(4) Understand Their Rights. Be sure you know and understand the government's rights and responsibilities.
The government's powers to inspect and seize information can be very broad – and often the warrants or subpoenas they present to or serve on the company are equally broad. However, legal counsel may be able to negotiate and narrow the scope of the government's request. It is also possible for legal counsel to negotiate with the government about extending the deadline for providing the information they seek.
(5) Identify Outside Help. Be sure you know which outside experts and advisors should be called to assist, e.g., media, public relations, IT specialist, auditors and law firms.
Knowing who your experts will be in advance is a key aspect of preparedness. There will not be time to identify, contact or interview prospective outside advisors the day of an inspection or raid. There will not be time to educate your outside experts on your company and how, where and by whom information is kept. It may be important for your outside experts to tour your key facilities to become familiar with the physical premises.
Many government inspections or raids occur before or during holidays or vacation weeks when trained employees are not in the office. Therefore, establishing a contact list that includes both external and internal information (i.e. home, mobile and office numbers) can be very useful in a crisis situation. Your response team can quickly assemble by phone or in person to handle the issues.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.