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Sunday, February 28, 2016

Strategic CSR - Whistleblowers

The article in the url below reveals an interesting trend in who is whistleblowing within companies and what are the consequences of these actions:
"'One of the trends that that raises some very delicate issues is the rising tide of in-house counsel as the whistleblower,' said Gregory Keating, a partner at Choate Hall & Stewart who leads the firm's whistleblower practice. 'In my own practice, which is 90% whistleblower defense, I'm seeing a disproportionate number of whistleblowers who are either counsel or compliance officers. ... The trend has only accelerated.'"
This trend of an increasing numbers of whistleblowers who are general counsel or compliance officers is important for two reasons. First, it raises challenging issues around attorney-client privilege:
"Mr. Keating co-authored a report on the ethical and legal issues raised by having corporate lawyers turn government informant, pointing to court restrictions on the situations where general counsel can bring retaliation claims. … 'It raises some dicey ethical issues because the in-house counsel is responsible for knowing the good the bad and the ugly…but is also able to access and use that information, which is often privileged, as part of a whistleblower proceeding,' Mr. Keating said."
Second, as part of the expanded protection for whistleblowers that is gradually becoming established in the U.S., courts are allowing whistleblowers to sue individual members of the board, which raises the stakes for Directors. The case highlighted in the article demonstrates this possibility:
"… in California revolves around a general counsel alleging he was wrongfully terminated for pursing a Foreign Corrupt Practices Act investigation in China. … [In the case] a judge allowed him to sue individual board members in his quest for compensation for being fired."
Take care
David Chandler & Bill Werther
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More Company Lawyers Turn Whistleblower
By Stephen Dockery
October 29, 2015
The Wall Street Journal