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The Interests of Employers and Employees Are Not Always Aligned

White Collar Criminal Defense By Harvey Binnall PLLC - 2018/07/20 at 08:07pm

When businesses are being investigated for white collar criminal activity, they generally make an attempt to control information leaks, to identify system failures that may have given rise to compliance issues, and to cooperate with certain employees in the organization who may have knowledge of the activities at-issue, whether direct or indirect. 

If you are an employee at a business that is currently being investigated for white collar criminal activity, or has been charged with such crimes, then it’s important that you consult with a qualified attorney to serve as your independent counsel through litigation — though your employer may offer to pay for and provide legal representation on your behalf, there are likely to be conflicts of interest that could undermine your ability to avoid or otherwise minimize your criminal liability.

Employers May Have Different Interests to Protect in Litigation

Though the interests of employers and their employees are sometimes aligned, they are just as often misaligned.  The danger of inconsistent legal interests is very real, and could expose you to significant liability if you’re not careful — particularly as latent conflicts of interest may not be obvious in the early stages of litigation, and may only surface later, once you have already become reliant on your employer (and their paid legal representatives) to advocate on your behalf.

Let’s consider a quick example for clarification.

Suppose that you have been charged with a serious financial crime, such as falsifying business records, or money laundering.  Though you did not actually engage in the criminal activity at-issue, being charged with a white collar crime is quite overwhelming, and when your employer offers to assist with your defense, you agree.  You later find, however, that the employer is avoiding liability by using the fact that you are “on their side” to prevent the disclosure of information that could otherwise implicate them.  As litigation is public, your reputation is being dragged through the mud, and you are unsure about whether you will be held liable for crimes you did not commit.

Had you engaged your own independent counsel, then you would not have to submit to the whims of your employer — you could freely disclose information to prosecutors that absolves you of liability.

How the Yates Memo and Cooperation Credits Increased Tension

In recent years, the Yates Memo has changed the landscape of white collar criminal prosecution significantly, making it even more important for individual employees to retain separate counsel and avoid disclosing too much information to their employer.

The Yates Memo centers around individual accountability.  Basically, organizations are incentivized with “cooperation credits” (that mitigate their white collar criminal liability) if they play along with prosecutors and identify the potential misconduct of their employees.  This pits the interests of employers directly against their employees, heightening the conflict between both parties substantially.

Given this incentive structure, it’s important that you avoid revealing too much to your employer if you are under investigation or have been charged with a white collar crime — your employer may turn around and disclose the contents of that communication to the prosecution, thus gaining an advantage (through cooperation credits), and exposing you to the threat of criminal liability.

Contact an Experienced Alexandria White Collar Defense Attorney for Guidance

Harvey & Binnall, PLLC is a boutique litigation firm that has represented employee-and-employer defendants in white collar criminal defense litigation in Virginia, Maryland, and Washington DC.  We are a client-oriented firm, and as such, we keep clients well-informed throughout the white collar criminal defense process, from the internal investigation stage, to negotiations, to trial litigation.

Call (703) 888-1943 or schedule a consultation with our online case form today to speak with an experienced Alexandria white collar defense attorney here at Harvey & Binnall, PLLC.