Few understand the value of hard work like business owners. Entrepreneurs that put in the effort to build their business operations work hard from day one. Those who are able to establish themselves know that the road to success requires the ability to maneuver through many obstacles. Some are relatively easy to address while others can pose a bigger challenge. One example of a formidable challenge: an investigation tied to a whistleblower claim.
How will I know if my business is under investigation?
Notice of the investigation generally arrives through formal channels. Common indicators include:
- A subpoena, civil investigative demand or search warrant
- A regulator inquiry letter, preservation request or interview request
- A whistleblower hotline report, audit committee escalation or counsel letter
- A customer complaint referencing fraud, kickbacks, safety violations or data misuse
It is important for business owners to move forward with caution. Investigators can use even casual internal messages as evidence.
What immediate steps should I take to protect the business?
The goal is to contain risk and develop a response strategy. It is wise to centralize this response strategy through guidance from legal counsel with experience in these types of cases. A structured initial plan will generally include the following steps:
- Gather a response team. Engage experienced counsel. From this point onward, direct all fact gathering and responses through counsel.
- Gather evidence. It is often helpful to preserve chat logs, backups, device images and third-party records.
- Communicate wisely. Limit need-to-know distribution and control internal communications. Refrain from any posting on social media regarding the investigation.
- Avoid allegations of retaliation. Assess retaliation risk, maintain whistleblower protections, document employment actions and pause nonessential discipline.
Although the above can provide an idea of what to expect, the exact process will vary depending on the details of the situation and guidance from counsel.
A whistleblower claim is a legal event, not an HR issue. Business owners are wise to prepare for a high level of scrutiny. A proactive defense strategy tailored to the details of your case can help to preserve business interests and mitigate the impact of the investigation.