“ To err is human.
To blame it on someone else shows management potential.”

– Unknown

ACTUAL CASE HISTORY: Gary, 44, was a staff writer for an online entertainment industry blogsite. Most of his writing in recent years was about trends in subscriptions to live streaming music. His special expertise was in data collection and analysis to spot trends, and he was widely known as an expert in that area.

Gary’s analysis of live-streaming subscriptions lead him to the firm conclusion that certain of the largest live streaming music companies – indeed, the largest ones in the music industry – were losing more and more subscription customers to their smaller, more focused, and nimble competitors. When he wrote a significant article about this trend, his editor refused to publish it, claiming that it was replete with illogical assumptions on Gary’s part. This had never happened to Gary before in his 20 or so years as an entertainment industry writer.

Separately, two colleagues approached Gary in confidence, and shared with him that the blogsite’s editor had admitted to them that she declined to post his article because she was afraid of backlash – in the form of less advertising – from the larger streaming services, who were the blogsite’s “bread and butter.” They even shared an email in which the editor claimed to have been pressured to do so by the blogsite’s owners.

Gary then submitted to Human Resources a formal complaint of breach of his contract provision that forbade editorial decisions being made on financial considerations, and also that this was a breach of ethics and company policy. A two-week “investigation” by the blog site’s outside lawyers concluded only that “We did not find that anything improper has taken place,” despite the emails, the witnesses, and the circumstances that clearly showed otherwise.

Only after Gary brought the situation to the attention of the company’s CEO and Board of Directors did real progress toward addressing the problem begin to take shape.

LESSON TO LEARN: The most important lesson my mother taught me is that, “Without accountability, you really can’t expect responsibility.” Let’s face it: if failure to pay your taxes was not illegal, and no one checked whether or not you did, would you really do so? (As a lawyer, I must advise you that you need not answer that.)

Let’s all simply accept the reality that the same thing happens at work: many managers will not do the “right thing” if no one will hold them accountable for their failures to do so. And that is why they often hire “investigators,” not to determine the truth but to protect themselves from it.

Over my 35 years as an advocate for employees, many times I’ve helped clients file claims or complaints with their employers’ HR department, compliance department, and legal department of wrongful behavior against them by means of (a) discrimination, (b) harassment, (c) hostility, (d) retaliation, (e) dishonesty, (f) fraud (especially regarding Performance Improvement Plans), (g) threats of violence, and other misconduct by their managers or colleagues. In past years, some of those investigations found that the complaints were fully justified; other times, it was concluded that there was no basis for the complaint. The reasons given for not finding a basis for the complaint were often shared, and included (i) a misunderstanding of what was said or done, (ii) the alleged “offense” was only a very minor transgression, and (ii) the alleged “offense” may have taken place, but it was done in error, that is, without wrongful intention.

Increasingly, however, employers’ investigators – whether Human Resources, in-house Legal Staff, Employee Relations, or external investigators, such as law firms – never, ever seem to find any wrongdoing. It’s as if we now live and work in a “world of angels.”

That is because “investigators” are almost always tasked not with determining the truth, but rather with three specific objectives, namely, to:

1. Gauge Risk: To gauge the amount of risk posed by the complaining employee and his or her complaint, to both senior management, personally, and the organization or company;

2. Diminish Risk: To frustrate the employee’s efforts to exercise his or her legal rights, determine the truth, protect themselves, and hold the “guilty” persons accountable for their wrongdoing, misconduct or negligence; and

3. Divert Accountability: To ensure that no one – and most of all members of senior management – are not held accountable for wrongdoing, what we call brought into the “zone of accountability.” Said a bit differently, making sure that “the buck” does not stop on anyone’s desk.

And, it is close to never these days that investigators are willing to share the reasons “nothing wrong was found,” because that, itself, would raise a risk. This is so even when they are presented with such strong evidence of wrongdoing as, for examples, (a) incriminating emails, (b) damaging documents, (c) credible witnesses, (d) damning circumstances, and even (e) admissions of wrongdoing.

Sound a bit paranoid? Well, consider that Wells Fargo Bank internal and external investigators “investigated” internal wrongdoing for five years and fired over 5,000 of their branch personnel for opening up non-existent accounts, but found not a single thing wrong, in error, or even questionable about the conduct of senior management who both (a) directed, coordinated and collected bonuses of tens of millions of dollars as a result, and (b) were not even criticized, until Congress had open hearings about it and exposed this gross dishonesty and rank hypocrisy.

The ultimate issue is this: “Who is investigating the investigators?” The “secret” to truly resolving this dilemma is to make “someone in authority” accountable for what has taken place, and that “someone in authority” is almost always your employer’s senior-most management. When they are brought into the “Zone of Accountability,” you have significantly more leverage, which can be put to significantly better effect.

WHAT YOU CAN DO: These are the several steps you should consider taking in order to get past, over and beyond such “blindness to wrongdoing” on the part of “investigators” of any complaint you file at work:
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“If you don’t want anyone to know what you are doing, just don’t do it.”

– Yiddish Proverb

ACTUAL CASE HISTORY: Amy, a friend of many years, called my office one day, asking if she might speak with me confidentially. And she didn’t want to speak on the telephone. So we agreed to meet in a coffee shop the next day.

What she shared with me was quite unusual, and disturbing: she was a Senior Project Manager with a large real estate and construction firm. For almost a year she had been working on the construction of one of New York City’s most famous “new landmarks” and had encountered a problem. She was asked to do something that made her nervous. She didn’t know what to do.

Recent tests on the building’s concrete foundation showed mixed results. Since the tragedy of 9/11, foundation strength standards had been raised, and only about 2/3 of the building’s tests showed sufficient strength. Although not really a part of her job, she was brought in to the central office and was asked to “cherry pick” the positive reports, and discard the reports showing deficiencies, before submission to the City’s Department of Buildings. To say the least, she was frightened.

At least those were the facts as Amy knew them. Since she was not an engineer, and was not specifically trained in reading the reports, she was relying on the discussions among the engineers on site. She understood that there was a problem from conversations with engineers she believed to be knowledgeable in these matters. And she was suspicious from the very moment she was asked to present these reports to City officials and insurance representatives, as her usual duties had nothing to do with foundation tests. Was she, she wondered, being set up as a scapegoat?

Was there a “right” or “ethical” thing to do? Whatever was the ethical thing to do, could it hurt her job and career? These were very weighty concerns.

LESSON TO LEARN: Issues like the ones Amy faced are not that unusual. These days, it seems nearly every company is under pressure from investors and others to (a) cut corners, (b) bend the rules, and (c) twist the truth, usually in the name of cost savings or deadline pressures. It seems more often than in previous times that commercial considerations are coming into direct conflict with ethical concerns.

The issue might be one of public safety, or it might be a matter of tax evasion. Or pressures to cheat customers. One day it might be one issue; the next day it might be a different one. Whatever the issue, the dilemmas abound. It’s often hard to know what to do, when competing pressures are upon you. And those pressures can take their toll.

For those in this circumstance, we offer a rather simplified analytical tool that we sometimes call “The Six Questions to Ethical Clarity.” It is a set of basic, simple questions to ask yourself to figure out what is right to do when you’re simply not sure.

One thing about what is “right” to do: it can depend on one’s experience, one’s perspective and one’s judgment. That is, we all sometimes have “blind spots” in different situations. For that reason the question “Is it right to do?” often suggests getting the views of others with experience, perspective and judgment you trust. Just think about it: even the greatest ethicists of all time can and do disagree at times about “Is it RIGHT to do THAT?

WHAT YOU CAN DO: We do not claim any exclusive right to these six questions, because the ideas underlying them are commonly found in published articles, like this one, about ethical dilemmas in different situations. However, we present them to you in the context of issues that arise during employment, along with certain insights gleaned from the our client experiences over three decades.
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“In a room where people unanimously maintain a conspiracy of silence,”
one word of truth sounds like a pistol shot.”

– Czeslaw Milosz

ACTUAL CASE HISTORY: John Slowik, the former Chief Compliance Officer of Olympus America, Inc., the largest distributor of endoscopes in the U.S., discovered that his employer was paying bribes to win new sales. When he reported this to his employer, he learned the meaning of the old saying, “Tell your boss the truth, and the truth shall set you free.” Simply put, first he was retaliated against and, soon after, he was fired.

Slowik had discovered that Olympus was obtaining sales by giving away free medical equipment, paying for luxury vacations for physicians and their families, making hundreds of thousands of dollars in cash payments to physicians masqueraded as educational grants, lavishly wining and dining physicians, and paying exorbitant consulting and speaker fees to physicians. And, just as you might imagine, many of these payments were paid by you and me by means of higher prices paid by Medicare and other publicly funded insurers.

Slowik retained legal counsel experienced in employment law, who understood the gravity of what Slowik had reported. Slowik then sued Olympus based on allegations that the company had violated a federal law known as the “False Claims Act,” and a second federal law known as the “Foreign Corrupt Practices Act.”

Slowik had worked for Olympus for 18 years, starting as a finance manager, and through a series of promotions, in February, 2009 was appointed Olympus’s first-ever Chief Compliance Officer. He had no healthcare compliance background, and had only one employee, who also had no compliance background.

After Slowik sought to eliminate these systematic illegal practices, (i) his complaints fell on deaf ears, (ii) he was told to back off and instead “work around the rules,” (iii) his duties were diminished, (iv) his reporting line was lowered to the Head of the Ethics Department, (v) his compensation was frozen, (vi) he was increasingly isolated from others, and (vii) he was evaluated as a poor performer. Finally, (vii) he was terminated for poor performance.

To resolve Slowik’s lawsuit against Olympus, which even resulted in federal criminal charges against the company, Olympus agreed to pay fines and penalties to the U.S. government of $646 million, out of which Slowik was awarded $51 million.

In addition to the required payments, in order to avoid criminal prosecution, Olympus also agreed to:

• Hire an experienced Chief Compliance Officer, who will be a member of senior management, and report directly to the Board of Directors;
• Make the Chief Compliance Officer position not subordinate in function or authority to the General Counsel;
• Expand the Compliance Department from one full-time position to 19, and fund it appropriately;
• Engage independent third parties to conduct risk assessment targeted to compliance risks;
• Implement an anonymous reporting hotline, and
• Begin compliance training for all employees.

What happened to Slowik was a truly classic example of the treatment afforded so many Compliance Officers who raise sensitive issues of non-compliance with rules, regulations and laws. Often, there is just too much concern in the minds and hearts of management for the financial consequences of “playing by the rules.” How ironic it is that Slowik was fired for poor performance; in the end, he did quite a good job improving Olympus’s compliance organization.

Slowik’s whistleblower complaint did a great service for Olympus. But did it have to be so expensive for Olympus and so damaging to its relations and reputation?

LESSON TO LEARN: What happened to Slowik vividly illustrates an important point for all Compliance Officers, and for all other employees, as well: there are more ways than are commonly thought of to achieve true compliance in the workplace. In addition to “internal efforts,” the many state and federal so-called “whistleblower” laws stand ready to assist.

Can a fired Compliance Officer make use of the many whistleblower laws? Sure. Can a Compliance Officer do so if he or she is still employed? That is a great question, from both legal and ethical perspectives. I believe the answer is surely “Yes,” because in the end, the shareholders’ interests are aligned with the corrective purpose of whistleblower laws, and surely out of alignment with those who act – supposedly on shareholders’ behalf – in violation of applicable laws and regulations. And, too, the larger societal interests are best served by enactment of rules, and the observance of those rules.

Do we need all these rules and regulations? Do we need all these whistleblower laws? Considering Olympus’s and John Slowik’s experiences, apparently we do. Surely, the Olympus story offers a cautionary tale to other endoscope manufacturers, and others, as well, who might be tempted to “throw a party” for physicians at the public expense.

WHAT YOU CAN DO: Keep in mind that efforts to gain company compliance with applicable laws and regulations are not limited to working internally. The many whistleblower laws and programs that exist do “have your back.” Here are seven thoughts to bear in mind:
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“He who asks questions cannot avoid the answers.”

– Cameroon Proverb

ACTUAL “CASE HISTORY”: Celeste was at the end of her rope. For 12 years she had worked as a Senior Sales Manager for a large handbag manufacturer, and had risen over time in title, responsibilities, and compensation. To say that she was highly regarded and universally admired by all who she worked with would be an understatement.

Recently, though, her employer instituted a new policy: all Purchase Orders had to be reviewed by Divisional Sales Managers for “accuracy.” Celeste was puzzled because she had never, in her 12 years, heard of “inaccuracy” in the Purchase Orders she submitted, or those submitted by anyone else. Not once. Regardless, she complied.

Shortly after, Celeste began to notice that Purchase Orders were being “corrected” by increasing the sales price by a few percent, and decreasing the large-order discounts applicable to those sales. Worried about customer complaints, Celeste inquired about the “corrections” with her Manager; she was told that it was not her job to manage her Manager.

Sensing that something was not right, Celeste called the (supposedly) confidential “Integrity Hotline” telephone number in her Employee Handbook, and left a message questioning the new “corrections” policy. Within two days, Celeste received an email from General Counsel’s office to requesting that she attend a meeting with an Outside Legal Counsel without being told the purpose of the meeting.

Celeste sensed that she had better “play” this carefully, and that this could come back to “haunt” her in one way or another. And, so, she called us for a consultation. It was good that she did, because the “meeting” was to investigate her — and her “false allegations.”

LESSON TO LEARN: At work, every now and then someone finds it necessary to question, object, or complain about something that is simply does not seem right, legal or tolerable. It could be workplace violence, a danger to health or safety, illegal behavior, bullying, harassment, discrimination, retaliation or any number of other things.

Whether it is you who filed the complaint or someone else, you might be called in to answer questions of an investigator from (a) Human Resources, (b) Employee Relations, (c) internal legal counsel, (d) outside legal counsel, or (e) some combination of these people.

Most importantly, you need to understand that, as an employee, you have an obligation to cooperate in any investigation, whether or not you believe it affects you and whether or not you want to.

But questions remain, most commonly (1) “How should I prepare?”, (2) “What should I do or say?”, (3) “Can I bring a lawyer with me?” and (4) “Could I be hurt in some way by what I say?” Because your job and career might be on the line, it is unquestionably a stressful and tricky situation.

WHAT YOU CAN DO: Based on our many years assisting in such matters, here is what we advise our clients:
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Question: Dear Alan: I am considering writing a rebuttal to Human Resources to a vague, unfair comment made in my last performance review. I feel it was used to keep me from getting a raise.

When I asked my manager to explain the comment he could not do so, or even supply details. But, at the same time, he also said he would not change the comment.

What are the possible and most likely outcomes to writing a rebuttal? Will it damage my relationship with my manager? Will l look bad to future employers. Thanks in advance!

Concerned
Detroit, Michigan

Answer: Dear Concerned: To one degree or another, your question is undoubtedly on the minds of every employee who considers standing up for himself or herself at work. It is a threshold issue, and it needs to be addressed, one way or the other. Read the rest of this blog post »