The Boundaries of Internal Corporate Investigations Relative
to Employee Privacy Rights; A Case Study
Chaim Levin, Chief Legal Officer, Compagnie Financiere Tradition, USA
Corporate internal investigations often involve the complex yet delicate balance between employer and employee rights. An already complicated situation is additionally challenged by a veritable Pandora’s Box of difficult employment and cooperation choices. The corporate employer’s interests and obligations to its shareholders mandate that the enterprise obtain prompt, full disclosure from its relevant employees. In contrast, individual employee interests may be in conflict because of reasonable apprehensions over issues of self-incrimination or of personal privacy rights. Acrimony resulting from these competing interests can be quite contentious and unwelcomed in the business environment. While there is no easy solution or definitive clarity, at least one prominent appellate court carefully evaluated the competing interests of employers and employees and established certain helpful guidelines.
The debate starts innocently enough; a corporation learns that there is a possibility of wrongdoing by some of its employees and an investigation is launched. From the outset, a difficult inconsistency may be present; if a corporation generally can only act through its people, the means by which it is now compelled to address individuals possessing material information and who may be, at the same time, responsible for the wrongful or negligent act, is of critical importance. Other thorns in the investigative protocols include the means by which the corporation can persuade or compel employees to cooperate in the inquiry, particularly when the result could lead to their termination of employment or even worse self-incrimination with respect to possible or existing separate governmental, administrative or regulatory actions.
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