NCJ Number
177788
Journal
ABA Journal Volume: 85 Dated: June 1999 Pages: 64-70
Date Published
1999
Length
7 pages
Annotation
The best advice that attorneys can give their corporate clients regarding limiting their liability when an employee commits a crime is for the company to have a corporate compliance plan to prevent problems and recognize them in early stages.
Abstract
The case of Caremark International raises the issue of when a company's efforts to detect criminal wrongdoing in employees are sufficient to avoid corporate criminal liability. The Caremark decision made it clear that a company's senior managers and directors must make a good-faith effort to ensure that the company has an adequate system to detect illegal activity in a timely manner. Compliance plans are evolving from simple policy statements on paper into sophisticated management tools that actively involve all job levels and phases of operations. Companies are also increasingly going beyond legal issues and including ethical considerations into their programs. Prosecutors, in-house attorneys, and outside lawyers agree that large companies must have compliance plans in place. However, fear may not be the best incentive to induce management to support compliance planning. It may be preferable to emphasize the longer-term benefits of reducing outside safety inspections, improving efficiency, and possibly reducing insurance premiums. In addition, companies should reward ethical conduct rather than focusing on punishment as incentives to employees. Experts recommend a team approach to compliance planning. This approach should include attorneys with experience in criminal law as well as the substantive areas of law that affect the company's business. Companies have no guarantee of avoiding criminal liability, but they will reduce the chance of being charged if they self-report suspected criminal activity and cooperate with the government. Photographs