Insights

Senator Joni Ernst (R-IA) has issued a mandate to the Biden Administration: stop the spending spree with the remaining dollars in the CHIPs for America Program.  Senator Ernst’s missive is a direct response to Commerce Secretary Gina Raimondo’s push to have every employee in the Department of Commerce work overtime to spend billions of dollars in CHIPs funding before President Biden leaves office—a push that has already resulted in almost as much spending since the November 5thelection as was spent in the preceding two years since the CHIPs Act was passed.  Senator Ernst warned, the success of the CHIPs initiative “requires thoughtful planning and strategic spending, not binge buying shopping sprees by bureaucrats shoveling billions out the door before” Biden’s term expires. 

On Monday, September 23, 2024, the Department of Justice (DOJ), released an update to its Evaluation of Corporate Compliance Programs (ECCP) guidance.  The ECCP guidance was last revised in March 2023, which brought a number of significant changes, including a focus on compensation and incentive structures (e.g., clawbacks), and third party messaging applications.  This 2024 update, while not as significant in scope as its predecessor, nonetheless highlights the DOJ’s focus on new and emerging technologies, such as artificial intelligence (AI), as part of its evolving assessment of what makes a corporate compliance program truly effective, and how prosecutors should evaluate risk assessments and other management tools at the time of a corporate resolution.

As the primary civil enforcement statute for investigating and remedying fraud in connection with United States government programs, the False Claims Act (FCA) has resulted in more than $75 billion in recoveries of government funds since 1986. The FCA imposes liability on any person or entity that knowingly submits false claims or certifications to the government or improperly retains money owed to the U.S. government.

On August 1, 2024, Deputy Attorney General Lisa Monaco unveiled the Department of Justice’s new Corporate Whistleblower Awards Pilot Program. The announcement marks the conclusion of the Department’s previously announced “sprint” towards a pilot program, as DAG Lisa Monaco first previewed back in March of this year. 

On April 15, 2024, the Acting Assistant Attorney General for the Criminal Division of the Department of Justice (“DOJ”) Nicole Argentieri announced a new Pilot Program on Voluntary Self-Disclosure for Individuals (“Pilot Program” or “Program”). The Pilot Program offers a clear path for voluntary self-disclosure by certain corporate executives and other individuals who are themselves involved in misconduct by corporations, in exchange for a Non-Prosecution Agreement (“NPA”). The Pilot Program specifically targets individuals who disclose to the Criminal Division at DOJ in Washington, D.C. information about certain corporate criminal conduct. By carving out a clear path to non-prosecution for those who qualify, DOJ has created another tool to uncover complex crimes that might not otherwise be reported to the Department. 

On March 7, 2024, Deputy Attorney General (DAG) Lisa Monaco delivered remarks at the American Bar Association’s 39th National Institute on White Collar Crime announcing a new Department of Justice (DOJ) pilot program that incentivizes whistleblowers to report corporate misconduct by offering monetary rewards.  Likening the program to “the days of ‘Wanted’ posters across the Old West,” DAG Monaco explained that individuals who help DOJ discover otherwise unknown, “significant” corporate or financial crime could receive a portion of the resulting forfeiture.  This program will encourage whistleblowers to report a broad range of criminal activity by bridging the divide between DOJ’s priorities and other whistleblower mechanisms such as the False Claims Act’s qui tam provision (which is only available for fraud against the government), and programs at the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and other federal agencies (which only cover misconduct within their respective jurisdictions).  By placing a bounty on corporate actors, this DOJ pilot program—which will be developed by the Department’s Money Laundering and Asset Recovery Section (MLARS)—underscores the need for companies to take stock of their compliance programs and enhance their internal reporting infrastructure.    

On February 8, 2024, the Supreme Court decided Murray v. UBS Securities, LLC, No. 22-660, holding that a whistleblower must prove that his or her protected activity was a contributing factor in the unfavorable personnel action but does not need to prove that his or her employer acted with “retaliatory intent.”

On October 24, 2023, Gurbir S. Grewal, Director of the U.S. Securities and Exchange Commission’s (“SEC”) Division of Enforcement, provided a preview of the agency’s enforcement outlook against Chief Compliance Officers (“CCO”) in the upcoming year.  His remarks highlight the continued importance of compliance programs (and continued focus on the part of regulators on those programs), but also make clear that SEC enforcement actions targeting behavior on the part of CCOs will continue to be rare.

On October 2, 2023, the Equal Employment Opportunity Commission (“EEOC”) published proposed guidance that clarifies and updates the legal standards and employer liability applicable to harassment claims under federal law, including Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. The guidance remains open for public comment until November 1, 2023. If the guidance is finalized, it will be the first guidance on harassment claims that the EEOC has issued since 1999.

On Friday, the Department of Justice released an updated version of its Evaluation of Corporate Compliance Programs (“ECCP”) guidance—the latest in a series of updates to the administration’s approach to corporate criminal resolutions, and the first substantive update to the ECCP guidance since June 2020. The update marks the latest pronouncement in the Department’s ongoing focus on corporate compliance programs, highlights a continued emphasis on individual accountability, and in particular, fleshes out its expectations in two key areas—compliance related compensation and consequences, and management of messaging apps—providing corporate leaders and compliance teams with additional detail to guide programmatic and policy decisions.

On April 27, 2022, the Chicago City Council passed amendments (“Amendments”) to its Human Rights Ordinance (“Ordinance”) adding significant sexual harassment prevention requirements for employers, including new employer policy, notice, and training obligations, expanded recordkeeping requirements, and stricter penalties for violations. The Amendments also expand the definition of “sexual harassment” and “sexual orientation.” The Amendments, which apply to all employers with at least one employee working within the geographical boundaries of the city of Chicago, took effect on June 4, 2022. Chicago employers, however, have until July 1, 2022 to implement the amended sexual harassment prevention requirements.

Whistleblower activity—including new whistleblower laws—has increased in recent years; however, the number of internal whistleblower complaints has fallen. Internal whistleblower complaints are an opportunity for employers to correct misconduct, noncompliance, or other workplace problems as they happen. While this presents a challenge for employers, it is also an opportunity to reevaluate internal policies, training, and workplace culture. In this article, the second installment of a two-part series, Director of Global Corporate Compliance for Corning, Inc., Dan Christmas, along with Crowell’s Preston Pugh, Trina Fairley-Barlow, and Rachel Lesser, discuss strategies for maximizing the benefits and minimizing the risks of increased whistleblower activity. Part one of this series, available here, reviews the rise in whistleblower bounty laws and other laws designed to incentivize reporting.

On Monday, August 2, the Securities and Exchange Commission (SEC) announced that it will review two amendments to the SEC’s whistleblower program rules that were adopted in September 2020. 

2020 was one of the first years in memory when many multinationals saw a reduction in the number of internal whistleblower complaints, and a sharp increase in the number of external whistleblower complaints. In this environment, several countries around the world are finding ways to incentivize external whistleblower complaints, including—following the United States’ lead—providing bounties tied to money that governments recover as a result of those complaints. In this article by Crowell & Moring Partner Preston Pugh and Incoming 2022 First Year Associate Danielle Alvarez, part one of a two-part series, we discuss the development of these laws and the specific types of complaints whistleblower bounty laws cover. In part two, we will provide recommendations on how multinationals can best prepare for these developments.

On Monday, July 26, 2021, a bipartisan group of senators, led by Sen. Chuck Grassley (R-Iowa), introduced a bill titled “False Claims Amendments Act of 2021” aimed at “beef[ing[ up the government’s most potent tool to fight fraud.”

Over the past few years, both the government and False Claims Act relators (whistleblowers) have targeted more types of defendants than they have ever previously.  Against this backdrop, Congress passed two of the largest relief bills in modern history and thus even more companies find themselves involved with the federal government in a new way or for the first time  This article examines the government’s enforcement of FCA against such new or non-traditional defendants and provides key takeaways.

Crowell & Moring LLP’s 2021 series of client alerts: Whistleblowing – A Guide to Compliance is intended to provide companies with a practical guide to help them comply with their obligations under the EU Whistleblower Directive. Via a monthly alert, Crowell & Moring LLP will explain the different steps that companies need to take for compliance and emphasize various points for consideration.

Yesterday, February 17, 2021, Senator Chuck Grassley (R-IA) and Acting Assistant Attorney General of the Civil Division, Brian Boynton, highlighted the central role that the False Claims Act (FCA) has held and will continue to play in the government’s civil fraud enforcement toolkit for years to come. In prepared remarks at the Federal Bar Association’s 2021 Qui Tam Conference, Grassley confirmed that he is drafting legislation intended to curb what he called the government’s incorrect interpretation that the Department of Justice (DOJ) has unfettered authority to dismiss qui tam lawsuits brought by relators. In an apparent reference to the Supreme Court’s landmark decision in Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), Senator Grassley also asserted that the courts have weakened the statute by dismissing cases based on a misapplication of the FCA’s materiality requirement, another area that he suggested was ripe for Congressional intervention. In separate remarks, Boynton highlighted DOJ’s top priority areas for FCA enforcement in the coming years as well as tools the government is developing to increase its ability to uncover complex fraudulent schemes.

On January 19, 2021, the Eleventh Circuit affirmed a district court’s rejection at summary judgment of a disgruntled employee’s False Claims Act (FCA) retaliation claim in Hickman v. Spirit of Athens, No. 19-10945 (11th Cir. Jan. 19, 2021). The Court’s decision makes clear that, despite expansions to the FCA in 2009 and 2010 protecting employees who engage in “efforts to stop 1 or more violations” of the FCA, plaintiffs must nevertheless establish that they held an objectively reasonable belief that they were attempting to prevent the submission of false claims to the government for their conduct to constitute protected activity.