Factors Influencing Corporate Culture – Chart From The IIA – Plus, Let’s Agree Upon Sample Culture And Governance Audit Programs

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Passing this along, a chart from the Institute of Internal Auditors, identifying factors that influence corporate culture. I’m not sure about some of the ranking – particularly training and enforcement through disciplinary measures – it seems to me that those two categories would be ranked higher, and at about the same level as the establishment of a code of conduct (i.e., immediately below the first two ranked factors). Just comments for thought.

This chart came from a discussion about how to audit culture, and that it can be audited. As noted, for years auditors have tended to stay away from auditing culture, and I’ll also add governance as an audit area that auditors, internal and external, tend to stay away from, which is really perplexing since for years it has been known that culture is an important indicator of the possibility of fraud and unlawful acts. But, if I’m not mistaken, from my years of audit, when designing or planning the audit, doesn’t the external auditor already to some extent do an evaluation of and take into consideration the estimated reliability of the financial recordkeeping processes and internal controls – and wouldn’t that, or doesn’t that, or shouldn’t that, already to some extent take into consideration aspects of culture and governance?

Now both the COSO 2013 internal control framework and the new COSO enterprise risk management (ERM) framework list culture and governance as important framework criteria. Culture and governance are the first, underlying criteria in the new COSO ERM framework. And many other organizations are now promoting culture, including the National Association of Corporate Directors.

LET’S NOW HAVE A PUBLIC DISCUSSION TO DEVELOP CRITERIA AND STEPS FOR SAMPLE AUDIT PROGRAMS FOR (1) CULTURE AND (2) GOVERNANCE!

And, I say a “public discussion” because public and private businesses, nonprofits and governmental entities, and their auditors, will then have criteria to try to meet or exceed. Note, however, that I am not advocating that the criteria and steps create a legal standard. Internal controls and risk management design are highly discretionary – any effort to create a broad legal standard, other than, for example, the business judgment rule, will be met with extreme resistance, and very most likely failure and an inability to move these topics forward.

So . . . if you are an internal auditor, or an external auditor, how would you, or how do you, describe to management and the audit committee, and perhaps the board, the steps that you would take to audit the entity’s culture and the entity’s governance?

That’s all for now. I’m David Tate, and I’m a California litigation attorney, and I also handle governance and risk management. You need to consult with an attorney or appropriate professional about your situation. This blog post or video or audio is not an advertisement or solicitation for services inside or outside of California. Thanks for listening, viewing or reading.

David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com

See also my blogs at http://californiaestatetrust.com and at http://auditcommitteeupdate.com

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

Audit Committee 5 Lines of Defense 10222017 David W. Tate, Esq. jpg

 

 

 

Prior bad acts in the news – how would they be handled in court?

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For several weeks the news has included allegations of misconduct and bad acts by leading people in Hollywood, elected representatives in Washington DC, and others. I believe that news of past bad acts and misconduct will continue.

The allegations and alleged circumstances are disturbing, very disturbing, to say the least.

Of course, there are facts, documents, testimony and other evidence that we don’t know, and that haven’t been explained. But the allegations are in the court of public opinion and social media, so everyone can reach their own opinions based on what is communicated.

In court every defendant has the right to defend himself or herself, and that is the way it must be. There is a general presumption of innocence, but that presumption is not always true in civil cases where the burden of proof can sometimes be shifted, such as if there is a fiduciary or trusting or confidential relationship.

In a lawsuit the issue can arise about how to handle prior bad acts or actions by the accused? Prior bad acts or actions, if proven to be true, can be very damming. The judge decides whether prior bad acts or actions of the accused can be admitted into evidence in a lawsuit about current new charges. This can be a difficult decision.

Proven prior bad acts or actions of the accused generally can be admitted into evidence to prove a pattern or practice of the accused or that the accused knew how to do something, but only if the prior bad acts or actions are sufficiently similar in type or nature to the type of wrongful act or conduct that is at issue in the current lawsuit.

But proven prior bad acts or conduct of the accused also can be held to be inadmissible as evidence in a court of law if their relevance or usefulness with respect to the current charges or allegations and possible guilt thereof is outweighed by the prejudice to the accused on the current new charges. Just because it is established that the accused committed a wrong of a similar type or nature in the past does not prove that the accused committed the current new alleged wrongful act, but it can establish that the accused had a pattern or practice of committing or that the accused knew how to commit the type of wrongful act or action that is at issue in the current lawsuit. It still must be established by admissible evidence that the accused committed the current charges or allegations – prior similar bad acts or actions alone will not suffice to establish guilt or liability on the current new alleged wrongful act. This can be a complicated issue.

That’s all for now. I’m David Tate, and I’m a California litigation attorney, and I also handle governance and risk management. You need to consult with an attorney or appropriate professional about your situation. This blog post or video or audio is not an advertisement or solicitation for services inside or outside of California. Thanks for listening, viewing or reading.

David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com

See also my blogs at http://californiaestatetrust.com and at http://auditcommitteeupdate.com

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

Audit Committee 5 Lines of Defense 10222017 David W. Tate, Esq. jpg

 

 

 

 

Roy Moore – some comments about handwriting authenticity

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Roy Moore and his possible handwriting have been in the news.

It has been suggested that his alleged handwriting should be analyzed. That would certainly be done if this was in a court of law. Of course, this issue is now in the court of public opinion and social media.

Here are a few thoughts and comments about handwriting authenticity. Of course, there are facts, documents, testimony and other evidence that we don’t know, and that hasn’t been explained. Handwriting authenticity is an interest issue. I have had this issue in multiple cases.

Each party would want to have a handwriting expert evaluate the original of the questioned handwriting. The original may better show such things as pressure, starts and stops, changes in strokes, and whether or not different pens were used.

You would also want known accepted handwriting samples from Roy Moore that were written relatively close in time to when the questioned handwriting was written, and if possible that were written with a similar writing instrument.

I would caution that handwriting definitely is not an exact science, and with a little experience or some classes it’s not hard for a person to hold himself or herself as a handwriting expert.

Which means that different handwriting experts can focus on different things, and will have different opinions.

For credibility purposes, I would want a handwriting expert who has training and experience through the FBI or other law enforcement.

That’s all for now. I’m David Tate, and I’m a California litigation attorney, and I also handle governance and risk management. You need to consult with an attorney or appropriate professional about your situation. This blog post or video or audio is not an advertisement or solicitation for services inside or outside of California. Thanks for listening, viewing or reading.

David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com

See also my blogs at http://californiaestatetrust.com and at http://auditcommitteeupdate.com

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

Audit Committee 5 Lines of Defense 10222017 David W. Tate, Esq. jpg

 

 

 

We need a new push for civility in how we communicate with, and in how we physically and mentally treat each other – audio and text

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See audio and text of this post below.  David Tate, Esq.

Audio:

 

Text:

Hello, I’m David Tate. I’m a California litigation attorney, and I also handle governance and risk management.

We need a new push for civility in how we communicate with, and in how we physically and mentally treat each other.

Do these ring a bell:

Name calling;

Gross hyperbole, unsupported assertions, or mischaracterizations; or

Destructive talk for no other purpose except to denigrate, disparage, vilify, belittle, bully or demonize the other person or argument?

This is a tough topic because generally, and constitutionally people are entitled to their right of opinion, expression and communication or speech, and the manner in which they do it – people legitimately do express themselves and act in different manners, as long as it isn’t unlawful.

And people are entitled and encouraged to advocate for their positions. Indeed, if you don’t advocate, your voice will not be heard.

Censorship, and regulating speech in general, are not the answer as they can tend to lead to oppression or at least suppression of speech, ideas, information and communication.

Often there is no clear bright line over which people should not cross in their communications. Sometimes those issues end up in court before a jury.

I’m just saying that with all-the-time, instantaneous 24-hour news and social media, and with what I am hearing and seeing daily, it seems clear that we need a new push for civility in how we communicate with, and in how we physically and mentally treat each other.

And I would like to see all of us, including people who are in positions of leadership or power, and who should have integrity, make that push and encourage others to also do so.

Who knows, maybe there will be a new interest in teaching and learning oral and written communication and persuasion methods and techniques, and in spotting false, misleading or unsupported techniques and arguments.

That’s all for now. I’m David Tate, and I’m a California attorney. You need to consult with an attorney or appropriate professional about your situation. This blog post or video or audio is not an advertisement or solicitation for services inside or outside of California. Thanks for listening, reading or viewing.

David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com

See also my blogs at http://californiaestatetrust.com and at http://auditcommitteeupdate.com

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

Audit Committee 5 Lines of Defense 10222017 David W. Tate, Esq. jpg

 

 

 

Another disturbing nursing home story, in addition the Florida IRMA SNF deaths – need for ERM, leadership, transparency, reporting, and follow-up

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I have also posted this discussion at http://californiaestatetrust.com

Below, at the bottom of this blog, I have pasted a video at a nursing home that I came across on Yahoo. First some disclaimers – by now we should all be aware that watching snippets or portions of a video does not tell the whole story, knowing the whole story could present a different situation, we don’t know all that was said or that occurred, and, of course, I have no personal knowledge of these events, but am simply passing this along.

That having been said, the video and information presented are disturbing.

At her deposition the supervising nurse testified that what occurred is different than what the video shows, and acknowledges or admits this, and she admits that the nurses or nursing assistants on scene acted wrongfully and should have been fired if the truth had been known.

If not for the video the truth would not have come to light.

An issue arose whether it was legal to install a secret video recording device in the resident’s room. It is my understanding that a nursing home resident is a resident, not a patient, and that the nursing home, and their particular room is their home.

The lawyer mentions that he cannot say anything about the settlement agreement with the nursing home. In California, except in limited circumstances, Code of Civil Procedure §2017.310 makes a confidential settlement agreement unlawful if the factual foundation presents a case of elder or dependent adult abuse.

California also has a criminal elder abuse statute at Penal Code §368. I’m not saying that the acts in the video were criminal – based on what is being shown, in a court of law more likely the acts would be considered medical malpractice in nature, but could still be civil elder abuse.

The nursing home would raise a whole host of defenses to liability, including, for example, possibly, that the plaintiffs or prosecution cannot show with evidence that the actions of the nursing home actually caused the resident’s death. But there also could be issues about burden of proof, and it is possible that the burden of showing no wrongful conduct could be shifted to the defendant nursing home.

We could go on and on with this. There is a lot more that I would like to know, including, for example, about the policies and procedures of the nursing home at the time of the incident, and about the investigation that the nursing home did at the time of the incident and whether that investigation, if any was done, was sufficient and performed appropriately and in good faith?

I would also like to know about the “new management” of the nursing home, and about current policies and procedures, and whether the events of this occurrence were presented to the public or kept secret by the state nursing home regulatory authorities.

These stories and what occurs later in time get buried by the now constant 24 hour news and social media cycle – do you remember the hurricane IRMA story about the 8 nursing home residents who died because the air conditioning went out, but then weren’t transferred by the nursing home to a safe facility (such as, for example, possibly the nearby hospital) – well . . . what has happened since that time in the investigation, and so that something like that will not occur again?

That’s all for now. I’m David Tate. I’m a California litigation attorney. I also handle governance and risk management. You need to consult with an attorney or appropriate professional about your situation. This blog post and/or video or audio is not an advertisement or solicitation for services inside or outside of California. Thanks for listening or reading.

Here is the link to the nursing home video,

https://www.yahoo.com/lifestyle/disturbing-video-shows-dying-wwii-vet-neglected-nursing-home-193149764.html

David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com

See also my blogs at http://californiaestatetrust.com and at http://auditcommitteeupdate.com

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

Audit Committee 5 Lines of Defense 10222017 David W. Tate, Esq. jpg

 

SF Chronicle article – says new investigation report states that UC interfered with state internal auditor’s audit

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Note: I have also posted this discussion to http://auditcommitteeupdate.com

Click on the link below for the Chronicle’s story, stating that a new investigation report concludes that UC interfered with the state internal auditor’s audit of UC, including changing survey answers or results. I have previously blogged about the state auditor’s audit of UC, and, frankly, as an ex-auditor and after having been involved in litigation as an attorney for many, many years, I was and still am complimentary that the state auditor held her ground and called thing as she believed them to be – that can be a tough situation to be in, and I would be interested to hear whether the state auditor herself felt any pressure from any sources.

Let me also add that I have heard stories for years about internal auditors and compliance professionals, and also, sometimes, external auditors, who have felt pressure to conduct their activities, or to report findings, in a manner that was contrary to how they thought a particular matter should be handled or reported.

It is my understanding that the investigation report will be coming out, perhaps today. I haven’t seen the actual investigation report – I always like to see the actual source information or document – too much “news” today is skewed with intentional or unintentional bias, or is incorrectly reported, or is reported in a summary manner that causes the “news” to not be correct or to be misleading, or is reported with an objective in mind, or uses adjectives instead of facts and evidence, or is anonymous or from anonymous sources, or is really more opinion than facts and evidence (“opinion-jour”), etc. And there are always two sides to a story, and sometimes three, four, or more sides. There was a saying several years ago, trust but verify. I believe the options are: (1) trust and don’t verify, (2) trust but verify, (3) question but verify, or be skeptical but verify, and (4) don’t trust but verify, or distrust and verify. I’m at least at (3), and often at (4). Below is the link to the Chronicle article:

http://www.sfchronicle.com/bayarea/article/Report-says-UC-president-s-office-improperly-12358268.php

That’s all for now. Of course, each situation is different.

David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

Audit Committee 5 Lines of Defense 10222017 David W. Tate, Esq. jpg

 

Claim for violation of nondisclosure agreement must establish that the information disclosed was true

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Nondisclosure agreements are in the news. Here’s an interesting aspect of making a claim that a nondisclosure agreement was violated – plaintiff’s claim for violation of a nondisclosure agreement must establish that the alleged wrongful disclosure was of confidential but true information, which was covered by the nondisclosure agreement. Of course, there are also other important issues relating to whether or not a nondisclosure agreement was breached – such as, for example, whether the holder of the privilege (e.g., the plaintiff employer) can actually prevent the disclosure, or reporting of the information to all sources or just some sources (such as, for example, to the police or to a regulatory entity or to the board of directors, compared to the press or the public), or whether, regardless of the existence of the nondisclosure agreement, the person disclosing the information has standing and a right to bring a legal action relative to the event or occurrence from which the information arose (such as, for example, in a situation of alleged unlawful discrimination or harassment).

See, e.g., Glassdoor, Inc. v. Superior Court (2017) 9 cal. App. 5th 623, which held:

“An employer cannot establish a claim for breach of a nondisclosure agreement unless it is prepared to prove, and does prove, that the defendant disclosed actual confidential information, i.e., that his or her statements were, in some relevant degree, true. Nothing in this record would sustain a finding that the CEO’s statements—reported by Doe inaccurately, according to MZ—had this effect.

MZ’s hesitation on this point may be understandable, because Doe’s supposed disclosures do not cast MZ in a favorable light. But MZ cannot be excused from the requisite showing merely because proving a prima facie case might be embarrassing to it. If Doe accurately disclosed company policy, or the CEO’s statements regarding that policy, it was incumbent upon MZ to present evidence to that effect. Instead it denied the accuracy of Doe’s report without identifying any real confidential information it might be understood to have disclosed. MZ therefore failed to establish a prima facie case predicated on Doe’s account of the CEO’s statements.”

As an additional requirement, in trade secret cases the holder of the secret (e.g., the plaintiff employer) is required to describe the trade secret so that the court and the defendant are sufficiently apprised of the confidential information that is alleged to have been wrongfully disclosed – thus, since the disclosure of that confidential information by the holder of the secret would mean that the trade secret information is no longer secret and would therefore invalidate the holder’s entire case of trade secret secrecy, keeping that information confidential, while also sufficiently disclosing that information to the court and to the defendant is a requirement that must be carefully accomplished. Thus, for example, for California state court nondisclosure and trade secret cases, see also Cal. Civ. Code §3426.5, which states in part that the Uniform Trade Secrets Act, requires the trial court to “preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.”

That’s all for now. Of course, each situation is different.

David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

 

Help with workplace investigations

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The following are some comments in guidance about workplace investigations. We are currently seeing a lot in the news about situations where investigations did not occur, and also apparently where possible situations of unlawful activity occurred but were not reported (although in some situations knowledge of possible unlawful activity might had been widely known). And these issues don’t simply reflect on the victim and the accused, but clearly also reflect on the business, nonprofit or governmental entity at issue, and, variously depending on the situation, elected representatives, executive officers, boards of directors and the board committees, general counsel, compliance and ethics professionals, HR, perhaps internal audit and even the external auditor, etc., and throughout the entire organization. In recent prior posts you can also see discussions about the new COSO ERM framework which lists culture and governance as the first category of enterprise risk management.

An employer has a duty to take reasonable steps to prevent harassment, discrimination, and unlawful employment practices, and to correct inappropriate workplace behavior. See, i.e., Cal. Gov. Code §12940(k); and 29 CFR 1604.11(d). An employer can be liable for the failure to investigate, at least if there was underlying unlawful activity. And failure to investigate can be considered ratification of the unlawful activity.

In appropriate circumstances on a claim of wrongful termination by the alleged wrongdoer, when the terminated, wrongdoer employee did engage in unlawful behavior, the question can become whether the employer acted appropriately and in good faith after conducting a reasonable investigation, and based on a reasonable belief in that investigation – in other words, the reasonableness of the employer’s investigation can become the standard by which the employer is judged for alleged wrongful termination liability purposes.

So . . . the following are some of the issues and steps to consider or follow when determining whether the employer’s investigation of the conduct and situation was reasonable, and whether the employer had a reasonable belief in that investigation – did the employer:

  • Take the complaint of wrongdoing seriously;
  • Maintain confidentiality of the situation to the extent reasonably possible;
  • Conduct a timely investigation, promptly after receiving the complaint of wrongdoing;
  • Have the investigation performed by an investigator who is competent and knowledgeable about the relevant issues, and also how to conduct investigations, investigation techniques, evidence, writing reports and opinions, and oral communications and testimony (also, note issues that might be present if the investigation is performed by an attorney for whom attorney client or work product privileges might be claimed – in short, don’t use an investigator in which these issues might be present);
  • Follow appropriate complaint investigation procedures;
  • Listen to and treat both sides fairly and equally;
  • Obtain and understand the claims that are being made;
  • Give the alleged wrongdoer fair notice of the claims being made;
  • Provide the alleged wrongdoer with ample opportunity to offer evidence in his or her defense, including what occurred or not, documents that might be relevant, and the names of and information about witnesses who he or she believes can provide relevant comments about the alleged occurrence(s);
  • Have the investigator conduct a thorough investigation, under the circumstances (note that in some circumstances courts have held that the investigation need not necessarily be perfect, but it should be sufficient, reasonable and thorough under the exigencies and circumstances at hand without the benefit of full discovery or a trial);
  • Implement progressive discipline if appropriate; and
  • Have the investigator prepare a well-reasoned report and conclusion, supported by and based on objective evidence.

That’s all for now. Of course, each situation is different, and on many of the above points courts and regulatory agencies have provided additional guidance.

David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com  

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

 

 

 

Updated of possible risk management process summary chart

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I have updated my summary risk management process chart, and I have provided the chart below. The chart generally follows the new COSO ERM framework (see also below), with some additional tweaks. You can find additional discussions about the COSO ERM framework in earlier posts.

Thank you. David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in northern and southern California, http://rroyselaw.com

Overview of Possible Risk Management Process 11122017

 

Royse Law Firm – Practice Area Overview – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation because this is my primary area of practice)
  •             Business
  •             Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  •             Trade Secrets, NDA, Accounting Issues, Fraud, Lost Income, Royalties, Etc.
  •             Privacy, Internet, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, Board & Committee, Shareholder, D&O, Etc.
  •             Insurance Coverage and Bad Faith
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Contentious Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions Including AgTech, HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

 

Good video about the GC relationship with the CEO, the Company and the Board – forwarding from Inside America’s Boardrooms

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I have provided below a link to a recent Inside America’s Boardrooms video discussing the relationship between the general counsel (GC) and the CEO and the Board. You don’t hear these discussions very often. The GC represents the Company, not the CEO. But, of course, those common interests are most often aligned, but not always. The Board acts on behalf of the Company and the Shareholders, and as such you might say that the GC also represents the Board, but not the Board Members individually, and even this relationship between the GC and the Board can get sticky in some circumstances. This is a fascinating and important discussion.

Best to you, David Tate, Esq., Royse Law Firm, Menlo Park, California office, with offices in both northern and southern California, http://rroyselaw.com/