Yates Memo Upset Business Expectations: Chamber
The U.S. Chamber Institute for Legal Reform says that although it is too soon to measure the full impact of the 9/2015 Justice Department policy memorandum directing attorneys to focus enforcement efforts on holding individuals accountable for corporate malfeasance (memo from deputy attorney general Sally Yates), “it is nonetheless clear that the new threshold for cooperation credit has upset the expectations of businesses historically inclined to cooperate with the government.” A chamber white paper, “DoJ’s New Threshold for ‘Cooperation,’” says that the new policy is likely to have a number of unintended consequences that will muddy what has traditionally been a straightforward decision — whether to cooperate with a government investigation.
“By focusing so much attention on identifying culpable individuals,” the paper says, “the new policy risks alienating personnel whose cooperation and knowledge of facts are essential to any corporate internal investigation. It may also complicate compliance. For example, if company employees become reluctant to raise their hands to report transgressions for fear of drawing too much attention to themselves, the company has a greatly reduced ability to assess whether controls or existing compliance programs work, or how to improve them.”
Also, the chamber says, the “all-or-nothing” nature of the new cooperation standard risks creating more uncertainty for corporate decisions regarding the benefits of voluntary self-disclosure of suspected unlawful conduct. And the policy also has renewed concerns about the pressure to waive attorney-client privilege.
The paper argues that the changes created by the new DoJ policy “put businesses and in-house lawyers in the difficult position of knowing that questions of investigation methodology and control, attorney-client privilege, and even data privacy management will be subject to discussion and negotiation with the department lawyers who will ultimately decide what, if any, credit the company deserves.”
The document acknowledges a Yates 5/10 speech in which she attempted to clarify what is required for cooperation credit and to signal that the policy may not be as great a change as originally thought. It notes that some commentators have predicted that the Yates memo and its policy shift will be scrapped outright. “The department’s objective of encouraging corporate cooperation to help prevent and deter corporate malfeasance is an important one, and one that the business community shares,” it concludes. “However, compelling cooperation in the manner articulated by the Yates Memo and U.S. Attorneys Manual revisions may, in the end, have the counterproductive effect of driving the two sides further apart, not closer together.”