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GOOD. SMART.BUSINESS. PROFIT.TM
Hotline Confidential: Is Your Company Using Best Practices for Whistleblower Compliance?
May 29, 2014
Chelsie Chmela Events 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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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 Investigations Bachelor of Science:
Psychology & Criminal Justice Illinois State University
Master of Arts:
Forensic Psychology University of Denver
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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
Presenter: David Schwartz Partner, Labor and Employment Law Group Skadden, 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)
212-735-2473
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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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©2014 Convercent. All rights reserved.
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©2014 Convercent. All rights reserved. 19
HOTLINE CONFIDENTIAL
“The lower your expectations, the greater your disappointments.”
Communica)on
Expecta)ons Leadership
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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 CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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 CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
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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HOTLINE CONFIDENTIAL
©2014 Convercent. All rights reserved.
Thank you.
Questions?
Follow me on Twi9er @autumn8141
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HOTLINE CONFIDENTIAL
This webcast and all future Ethisphere webcasts are available complimentary and on demand for BELA members. BELA members are also offered complimentary registration to Ethisphere’s Global Ethics Summit and other Summits around the world. For more information on BELA contact:
Brette Baecker Senior Director, Engagement Services [email protected] 480.397.2656
Business Ethics Leadership Alliance (BELA)
June 11, 2014 Russian Sanctions: What the U.S. and
OFAC Directives Mean for Global Companies
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at: http://ethisphere.com/events/
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