When carrying out internal investigations into Foreign Corrupt Practices Act (FCPA) or other bribery issues, multinational employers may find themselves investigating alleged wrongdoing that occurred in more than one country. Lawyers and HR personnel, who often coordinate or directly carry out investigations overseas, need to understand that local laws, practices and cultural differences mean that the differences between investigations from one country to another, and the consequences of failing to understand them, can be significant. In this article, we outline some of the key considerations for multinational employers when they are conducting cross-border investigations.
Understand requirements for holding investigatory interviews
A company needs to understand employees' rights under their contracts, the company's internal rules and local law when determining to how to conduct investigatory interviews. Some jurisdictions impose restrictions or procedural requirements on a company's ability to interview employees. Employees may have the right to prior notice of interviews or to have representation (see below); they may also be entitled to see notes from the interview and/or to have copies of documents.
Review whether the employee is entitled to representation
Depending on local laws and collective agreements, employees may have the right to be accompanied or assisted by a colleague or by a trade union or works council representative when being interviewed about alleged wrongdoing. In some jurisdictions, the employee may even have the right to legal representation during an interview, or it may be advisable to permit an employee's lawyer to be present during an interview even if it is not legally required. Companies may be required to provide separate counsel to employees whose conduct is at issue if those employees request separate counsel. Any such decision should be made only after consultation with local lawyers.
Consider language and cultural differences
Employees whose first language is not English may need or wish to have an interpreter present during interviews. Given the potential for misunderstanding and the possibility of cultural differences, it may be advisable to have a local HR or compliance representative conduct the interview or at least attend in an advisory capacity. Consider any jurisdiction-specific requirements at an early stage – eg, the need to conduct interviews in the local language or to provide translations of documents.
Disciplining or dismissing based on investigation
Whether and how to discipline an employee for a suspected or known FCPA / anti-bribery violation depends on many factors, including the severity of the violation and whether the employee's actions were legal under the local law and the company's code of conduct. If the company decides to pursue this course of action, then the company should:
- Consider consulting local employment lawyers, because labor laws in some countries can make it impossible, difficult or very expensive to terminate an employee, even for gross misconduct and
- Review the local law and the employment contract, and consider all lawful forms of discipline that might correct the behaviour and deter other misconduct.
It is important to document all steps taken in the process, for use in defending any future employment litigation initiated by the employee, or indeed in any action for civil recovery that the company may pursue against the employee.
Where suspension and/or disciplinary action is a possibility, consider that in some jurisdictions (such as Germany) there may be strict time frames for such action.
Be aware of data privacy issues
Data privacy permeates all aspects of an investigation carried out overseas or involving transmission of data (whether electronic or hard copies) from one jurisdiction to another, especially when data is transferred from the EU to the United States. (See our library of information about the EU's General Data Protection Regulation to learn more.)
All elements of the investigation – but in particular information obtained from corporate procedures encouraging confidential disclosure of internal wrongdoing (such as hotlines), email searches or other monitoring, review of personnel records and transmission of records across borders, whether electronically or otherwise – must be considered in the context of local privacy law. The consequences of violating these laws are severe, and may, for example, subject the company to government sanctions as well as significant fines. European data subjects also have a private right of action for data breaches.
Understand limitations on attorney-client privilege
Companies investigating claims of wrongdoing will be concerned with the possibility that the results of the investigation are subject to discovery/disclosure in a legal claim brought by a whistleblower, or by the government, or even in related claims brought by others. While information that is protected by attorney-client privilege usually will not be disclosable, rules of privilege are different in foreign jurisdictions. In cross-border investigations, companies should not assume that communications and documents that would normally be privileged in the United States (for instance) are protected since they may be governed by a foreign jurisdiction's rules. Outside of the United States, some jurisdictions do not recognize legal privilege at all, or recognize only a limited principle of confidentiality. Some jurisdictions may prevent the lawyer from revealing communications with the client, but do not protect the client from having to disclose communications with their lawyers. Further, while in the US legal privilege may attach to communications between in-house counsel and the client, in other jurisdictions this is not the case. Employers may need to consider involving outside counsel in order to help ensure that communications are privileged.
Although legal privilege is not recognized in all jurisdictions, it can still be important to proceed as though legal privilege exists (by maintaining confidentiality) to maximize the prospects of the communication being covered if transferred to a jurisdiction that does recognize privilege. Companies should seek to limit the creation of any non-essential documents that address the underlying facts of the investigation.