For 2016, we expect adulterated food-related investigations to continue to lead the headlines, inspiring food and beverage companies to ask what they can do to prevent and prepare for a potential outbreak on their watch or in their supply chain. A recent spate of significant adulterated food outbreaks and related criminal investigations and prosecutions ranging from ice cream to eggs, and melons to Mexican food, have highlighted the need for food companies to be increasingly vigilant in identifying and mitigating risks relating to food-borne illness at every step of the process.The Federal Food, Drug & Cosmetic Act (FD&C Act) prohibits introducing or receiving food in interstate commerce that is adulterated or misbranded. Depending on the nature of the violation, the FD&C Act provides for criminal prosecutions, including for misdemeanors (for first time, unintentional violations) and felonies (for repeat or knowing violations). Criminal FD&C Act enforcement has recently resulted in convictions and significant fines for corporations, and sentences of imprisonment for individual executives—including a 28-year sentence for a former CEO in a case where prosecutors were seeking life in prison.
We expect this trend to continue, both because of the high profile these cases generate, and because of the unique role management has in responding. For individual executives, both FDA’s Park Doctrine and the Responsible Corporate Officer Doctrine make it possible to prosecute certain executives even “without proof that the corporate official acted with intent or even negligence, and even if such corporate official did not have any actual knowledge of, or participation in, the specific offense.” Combined with the Department of Justice’s (DOJ’s) renewed focus on high-level individual prosecutions pursuant to the recent guidance of the Yates Memo, revelation of an adulteration or misbranding issue could present the perfect storm for executives caught unprepared.
But there are steps companies in the food and beverage industry can take in advance of a crisis to mitigate the risk one will occur, and to maximize the chances of quickly remediating its effects if it does.
- Periodically Assess Your Risk Profile and Compliance Program. Every company in the food and beverage industry should have a robust set of compliance tools and controls designed to identify and address risks related to misbranding and adulteration. Executives and managers at every level of the company should understand what they are, and the company should periodically review them to ensure they are appropriate and effective, well-understood and adequately enforced.
- Trust but Verify. It is fine to trust that your employees would never engage in the type of negligence or recklessness that is often the cause of adulteration and misbranding issues, but only if you are taking steps to confirm that belief to be true. This should include regular compliance training that gives employees at all levels the tools and knowledge to understand why compliance matters.
- Communicate, Enforce and Support. Employees need to hear from management that compliance matters, and see that message in action through consistent discipline against those who fail to adhere. Only then will they feel supported in making hard decisions to do the right thing, when cutting a corner could save time or money but increase safety risks.
- Have a Response Plan. No company sets out to put adulterated or misbranded products on the market, but all must respond when it occurs. Accordingly, most enforcement actions focus less on the fact that an outbreak or other issue has arisen, and more on how the company and its executives responded once they became aware of it. Having a response plan in place, and trusted advisors on call to assist, could mean the difference between weathering a small storm and floundering at sea.