The Wall Street Journal reported on 12 October 2014 that an ex-CEO is seeking to force his former employer to turn over the results of the company’s internal investigation. The CEO’s motion was filed in New Jersey federal court last week. The company has been investigated by the US Department of Justice (DOJ) for allegations of bribery of a foreign public official in which the former CEO allegedly played a role. The request is delicate because it targets the confidentiality of internal investigations, which play an important role in the DOJ’s fight against corruption abroad. Despite the recent assurance by Principal Deputy Assistant Attorney General for the Criminal Division Marshall L. Miller that the DOJ does not rely upon company internal investigations to make its cases, the fact is that the disclosure to the DOJ of companies’ internal investigations continues to be an important tool of US enforcers in their effort to shed light on allegations of corruption in foreign countries. Companies often decide to hand over to DOJ and SEC the results of their internal investigations in the hope and expectation of receiving a benefit in charging decisions or at sentencing. Unlike documents which are part of a DOJ investigation, documents prepared by outside counsel may be protected from disclosure by the attorney-client privilege. The ex-CEO now argues that the company waived its attorney-client privilege when it produced the findings of the investigation to third parties, including the DOJ. US courts have started questioning whether it is possible for companies to partially waive the attorney-client-privilege. A federal judge in New York had ordered a law firm in 2013 to turn over interview notes from an internal investigation. The US are not the only country in which there is controversy concerning the treatment of the results of internal investigations. Over the past years, courts in Germany had to decide whether or not public prosecutors investigating employees could seize investigation reports by external lawyers prepared for the company. The public prosecutors argued that the attorney-client-privilege did not apply because they were investigating a third party (i.e. the employee) and not the law firm’s client (i.e. the company). The discussion in Germany is still ongoing. Regardless of how the New Jersey federal court decides, this issue will not go away.
Nicolai Behr is a compliance and dispute resolution attorney in Baker & McKenzie’s Munich office. He is a member of the steering committee of GlobalComplianceNews, a compliance news website with global reach moderated by Baker & McKenzie. He is a member of the committee "International" of the German Institute for Compliance. Dr. Behr is a regular speaker on compliance and white collar topics.