By Casey Harris, ACCDocket.com business ethics columnist, and vice president, general counsel and secretary for Univera
I recently received a phone call from a co-worker of mine who was visiting our off-site warehouse for the day. He reported that while he had been there on another matter, the warehouse had received a visit from three Food and Drug Administration (FDA) agents. A little panicked since he was our executive over sales, not operations, my coworker had attempted to placate the agents and answer their questions to the best of his ability. And, as fate would have it, our sales executive had only been with our company for about two months, which was not nearly long enough to know much of anything about our dietary supplement handling and production. Luckily, he reported, the agents were going to return tomorrow to finish their audit of our facilities, so I and the Quality Assurance director could be there to welcome them in the morning while our sales executive made a fast escape from the warehouse as soon as he ended our conversation.
Having a little time before the FDA agents' return the next day, I turned to our outside regulatory counsel to alert him and ask his advice about the audit based on what information the sales executive had been able to gather. Along with some more specific details, our attorney counseled us to be open and honest with the agents, but not to volunteer information. That sounded like a bit of an oxymoron to me, but I was grateful for the advice as I met with the agents the next morning.
We welcomed the agents warmly, and showed them to the most comfortable area in the warehouse (which, as you can imagine, was not as comfortable as anyone would have hoped, being in a warehouse). After engaging in some pleasantries and introductions, the lead agent began by asking us a series of questions that he had developed prior to and during his visit of the previous day. The entire experience lasted less than two hours, and was not as adversarial as I had expected or been accustomed to in the past. There were likely some reasons for this posture, which I honestly think may have been somewhat in reaction to how we received the agents and what our attitude was going in. Now, in relating what I think may have made a difference in our case, I realize that this attitude may not be typical nor will it be the proper way to respond in any possible government regulatory response. I can clearly envision situations where it will not serve to act in accordance with the observations I make below. For example, if the regulatory action is particularly hostile on the part of the government, a far more aggressive response will likely be called for. It may not even be advisable to say anything at all, in contravention of our outside attorney's advice in our situation to be open, until a proper defense and case can be put together. Mine are only general observations, and won't (and shouldn't) apply in all cases.
- Make an effort. Our warehouse is a fair distance from our corporate office, and while it is not an all-day voyage away, it was certainly closer for the agents to go to our warehouse than to come to our office although that left the travel more inconvenient for us. We were content to not require the agents to meet us at the office because there wasn't anything hugely important at stake (that we knew of). As I debriefed the experience with our regulatory counsel afterward, he mentioned that it said "a lot to the FDA that the company's general counsel drove there for [the] inspection." We learned during the audit that the action was a routine one; that there was no particular reason for visiting beyond the FDA's mandate to oversee dietary supplements as part of its administrative framework. Therefore, there was no reason to turn the audit adversarial anyway. Our making an effort, albeit a small one, demonstrated our willingness to cooperate where we could.
- Concede the easy matters. As we talk about demonstrating willingness to cooperate, conceding the points that were of no real importance or principle to us also showed the FDA agents that we wanted to comply with the appropriate regulations. I honestly don't have the time or energy to "make a federal case" out of a tiny issue (pardon the expression in this instance), so it wasn't a big deal to agree to comply with some of the agents' minor suggestions. This set us up as willing to rationally discuss any larger issues the FDA may have had, which equally kept us from looking defensive. Again, this is not appropriate in all circumstances, but where the agents did not approach us with an attitude or an agenda, this was an entirely acceptable response in our instance.
- Be agreeable where appropriate. We set a pleasant tone early from our first moments with the agents. Warm handshakes, smiles, and deference to the agents' authority helped set a non-adversarial stage. Turning again to our outside counsel in his follow-up advice, "There are a couple of adages this episode brings to mind. First, with the government 'go along to get along.' Second, as is true in most of life, 'you can catch more flies with honey than with vinegar.'" I make a big effort to be sociable and kind in my interactions with people. Occasionally, that effort is not returned and is wasted. But, I have truly found in my life that being agreeable has paid off in large amounts time and time again.
- Answer only the questions asked. This can be a hard one to get used to if you've never spent time as a litigator (I have not). But, it's been an important lesson to practice as I've gone through my work experiences. You can almost count on only getting into trouble if you don't keep your communications clear and concise when there's any possibility your comments could be used against you. I'll talk a little more about this point in a future article, but this is a good point to remember not just in our present compliance context but in nearly all legal situations. Try to keep this in mind, especially if you're new to the legal field. It's good advice to teach your associates as well.
- Promise a rapid response where possible. The FDA agents asked a relatively easy task of us during our conversation, and because it was a small thing, I felt comfortable promising near-immediate compliance. I also asked how I could demonstrate our compliance with the agent, which also put us in the frame of being cooperative and conscientious of our obligations with regulatory agencies. The remainder of our conversation was easy when put in this context.
So, like I have said before in this and previous articles, I know this is not one-size-fits-all advice. If that were true, not very many of us could make a living offering advice to clients since all our counsel would be the same. I tend to think issues like this just require a little common sense, which I know is actually abundant in our little section of the bar. But, it can't hurt to have these principles in mind so that when an issue like a random government audit occurs, the advice is close enough to the top of your mind to be recallable.
For further reading, please download the ACC Docket article on “Unweaving the Dawn Raid Waive: Smart Prevention of Privilege Waiver for Multinational Corporations.”