Hotline Confidential: Is Your Company Using Best Practices for Whistleblower Compliance?

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Hotline Confidential: Is Your Company Using Best Practices for Whistleblower Compliance?

May 29, 2014

Chelsie ChmelaEvents Manager

[email protected]

703.960.2360

We welcome you to submit any questions for the panel through the chat functions you see on your screen.

HOST

QUESTIONS

MATERIALS You’ll receive a copy of this presentation following the webinar (within a few days) along with some additional resources. You can also contact us with any questions at [email protected].

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mailto:[email protected]

Hotline Confidential: Is Your Company Using Best Practices for Whistleblower Compliance?

Thursday, May 29, 2014

©2014 Convercent. All rights reserved.

Presenter: Autumn Lowry

Manager of Professional Services & Behavioral Sciences Specialist for Convercent

Areas of expertise:

• Corporate investigations on topics related to:Unethical conduct, retaliation, theft, harassment, discrimination

• Threat assessments for workplace violence incidents

• Corporate trainings on various topics including:Workplace violence, sexual harassment, and the Process of Workplace InvestigationsBachelor of Science:

Psychology & Criminal JusticeIllinois State University

Master of Arts: Forensic PsychologyUniversity of Denver

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HOTLINE CONFIDENTIAL


Presenter: David Schwartz

Partner, Labor and Employment Law GroupSkadden, Arps, Slate, Meagher & Flom LLP

David Schwartz advises clients on a full spectrum of employment-related issues, including before state and federal administrative agencies and courts, as well as in arbitration proceedings.

His litigation experience includes:

• Defense of whistleblower, discrimination, breach of contract and fraud claims

• Cases concerning the enforcement of restrictive covenants and breaches of fiduciary duties

In non-litigation matters, he has worked with clients to implement whistleblower and non-harassment policies; conduct internal investigations; negotiate collective bargaining agreements; create compensation programs; review reduction-in-force plans; and negotiate and draft employment and separation agreements.

Bachelor of Arts:University of Rochester (cum laude)

Juris Doctor: Cornell Law School (cum laude)

[email protected]

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Agenda and Objectives

• Examine whistleblower anti-retaliation statutes to ensure your organization is prepared to handle these claims

• Review best practices for instituting a hotline

• Discuss how to train employees on the existence of a hotline and anti-retaliation

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What is a whistleblower?

• Informant• A person who exposes alleged misconduct

• Violation of a law, rule, regulation, policy

Well known whistleblowers:

Frank Serpico (1967-1971) – NYPD, police corruption

Karen Silkwood (1974) – nuclear energy

Erin Brockovich (1993) – power plants

Jeffrey Wigand (1996) – “The Insider,” tobacco industry

Edward Snowden (2013) – NSA spying operations

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Sarbanes-Oxley (SOX) 2002

• Established requirement to hear employees’ whistleblower complaints

• Put procedures in place to protect the confidentiality of those who file complaints

• Retaliating against a whistleblower may carry criminal and civil penalties for your company and individuals

• Established OSHA administrative process

• Tight timeframes for filing of complaints and responses and issuance of determinations

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Dodd-Frank Wall Street Reform and Consumer Protection Act (2010)

• Focus: violations of securities laws

• Most commonly applied to public and financial companies• Some private and non-profit companies also covered

• Also applicable to employees of private companies (e.g., investment advisors) that contract with public and financial companies (e.g., mutual funds)

• Employers cannot discriminate against a whistleblower• Discharge, demote, threaten, harass (directly or indirectly)

• Whistleblowers’ information that leads to enforcement actions greater than one million can collect up to 30% of the settlement

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Occupational Safety and Health Act (OSHA) (1970)

• Must have a reporting channel available to report workplace hazards, illness, and injuries

• Must display a hotline poster

• Whistleblowers cannot be retaliated against, in general

• Over 20 statutes that protect against retaliation for reports connected to specific health and safety acts

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Equal Employment Opportunity Commission (EEOC)

• Responsible for enforcing federal laws related to discrimination based on a protected class

• Illegal to fire, demote, harass, or otherwise retaliate against someone who filed a charge of discrimination or participates in proceedings related to the filing of a complaint

• In 2013, 41% of claimants brought forth concerns related to retaliation

• Reporting procedure provides affirmative defense to some claims

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False Claims Act (FCA) (1863)

• Sets criminal and civil penalties for defrauding the US government

• Employers prohibited from retaliating

• Qui tam whistleblowers can collect up to 30% of the award

• Doesn’t specifically mandate the use of a hotline

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Federal Acquisition Regulation (FAR)

• Governs the acquisition process by which the government purchases goods and services

• 2009 Ethics Compliance Program Rule expanded obligations of government contractors to detect and report misconduct

• Must display hotline awareness posters

• Protects contractors who report issues internally and to the government

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US Foreign Corrupt Practices Act (FCPA) (1977)

• In 2012, DOJ and SEC released a resource guide

• Chapter 8 outlines elements of an effective FCPA compliance program

• Provide a mechanism for reporting suspected misconduct

• Whistleblowers should be able to report confidentially, without fear of reprisal

• Similar whistleblower provisions and protections as under SOX and Dodd-Frank

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Additional Considerations

• Some statutes apply to internal complaints and others to agency complaints only

• More than half the states have their own whistleblower laws• Some only apply to public sector workers while others extend

protections to private sector employees as well

• Industry-specific standards• Financial services and healthcare have enhanced requirements for

hotlines, self-disclosure, and non-retaliation

• US companies operating in foreign jurisdictions• Example: UK Bribery Act, EU Privacy Standards, data protection laws

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Takeaways

• There is a need for internal controls to limit the basis for complaints

• Whistleblower complaints are inevitable

• Oftentimes whistleblower complaints lead to investigations

• Investigations are painful

• Investigations are helpful

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“The lower your expectations, the greater your disappointments.”

Communication

Expectations

Leadership


Best Practices for Whistleblower Programs

1. Provide multiple contact points

2. Acknowledge receipt of complaints and act promptly

3. Develop, implement and communicate an internal process

4. Maintain records and documents

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1. Provide Multiple Contact Points

• Choice: confidential versus anonymous

• Multiple intake methods

• Have clear, well-publicized submission options

• Train managers who may intake reports

• Cultural awareness

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2. Acknowledge Receipt of Complaints and Act Promptly

• Responding in person

• Responding to a complaint submitted telephonically or online

• Responding to anonymous complaints

• Responding to former employee complaints

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3. Develop and Implement an Internal Process

• Develop an approach that is general enough to be applied to different kinds of complaints

• Assign a department/person to ensure consistency and enforce standards

• Act consistently and transparently

• Confidentiality• What can you promise?• What should you say?

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4. Maintain Records and Documents

• Establish and enforce practices for data entry and data retention

• Use a comprehensive case management system that supports investigations

• Consider the statistical data you want to capture

• Limit data access

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Hotline Best Practices

• Determine uses for the hotline

• Open and available 24/7, 365 days a year

• Support local languages

• Provide multiple channels for report intake (phone, web, in person)

• Offer anonymity

• Automated report distribution and alerts

• Case management capable of customized, detailed reporting with metrics• Policy and document search and download capabilities• Policy attestation • LMS

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Rewards

• Diminishes trust and credibility

• Frustrates internal compliance and reporting efforts

• Diminishes sense of civic duty

• Causes a delay in reporting

Fear of retaliation primary bar to reporting, not the lack of rewards.

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Hotline Communication Strategy

• Plan to communicate service frequently

• Communicate the services in ways that resonate with your employees

• Communicate in multiple formats

• Educate management on the services

• Goal = Report internally before going to the government

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Commitment to Non-Retaliation

• Legal protections vary according to subject matter

• Adverse action

• Explicitly and persistently communicate to employees

• Anyone involved in employee oversight, monitoring, and discipline should be trained to understand anti-retaliation expectations and implications

• Contract with a third-party to manage the hotline service and conduct workplace investigations to avoid the possibility of retaliation

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Conclusions

A successful Whistleblower Program must:

• Be compliant with federal, state, and local laws

• Be supported and communicated by the organization leaders

• Have an anonymous hotline that is appropriately communicated

• Emphasize non-retaliation through training and education

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Resources

[Guide] Answering the Call: Requirements for Reporting Channels

Convercent Case Manager

http://www.convercent.com/solution/case-manager/

• Full hotline, incident management

• Reporting and auditing

• Investigation management

• Demo available

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http://www.convercent.com/resources/answering-the-call-requirements-for-reporting-channels/

http://www.convercent.com/resources/answering-the-call-requirements-for-reporting-channels/

http://www.convercent.com/solution/case-manager/


Thank you.

Questions?

Follow me on Twitter @autumn8141

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