On an otherwise unremarkable day, you wander out to your company's front desk and find -- to your dismay -- a battalion of yellow-jacketed FBI agents armed with a warrant to search your building.
Are you ready?
Better be sure. A few wrong decisions could mean hundred-million-dollar fines plus prison terms for some executives.
Now that Furukawa Electric Co. has agreed to pay a $200 million fine for price fixing of wire harnesses, automotive suppliers might want to consider what they would do if the FBI shows up at their door.
It's more than a theoretical proposition because the Department of Justice is widening its price-fixing probe in the auto industry beyond wire harnesses.
At a recent presentation in suburban Detroit sponsored by the Society of Automotive Analysts, three experts offered a to-do list for companies under investigation by the Department of Justice's antitrust division.
Those experts - Scott Wrobel of consulting group Stout Risius Ross Inc.; Matthew Leitman of the law firm Miller, Canfield, Paddock and Stone; and George Donnini of the law firm Butzel Long - offered attendees a seminar on how to cope with a government probe.
Here are their tips:
- Don't make things worse. Make sure your employees don't destroy any documents, manipulate the historical record or try to coordinate their stories. If the Justice Department finds evidence of obstruction of justice, a subpoena can become much more serious.
- Call in the lawyers immediately. You are not obligated to talk to the FBI without counsel, and your employees are not obligated, either. But you can't order your workers to stonewall the investigators. The feds will tell you which employees will need their own legal counsel. To avoid a conflict of interest, hire outside lawyers to represent them.
- Form a response team immediately. In an antitrust probe, events move quickly. Since the feds have come to your offices, they probably have a strong case. Within days, you must decide whether to seek amnesty by blowing the whistle on your rivals. If you wait, your competitors may beat you to it.
- Create a data map of documents, laptops, smartphones, external hard drives, thumb drives, e-mail and other company data to which key employees have access. The government will tell you which employees are under scrutiny. Once you create a data map, you do not necessarily have to share it with the government. It allows your attorneys to ask the Justice Department which documents will be needed.
- Preserve relevant documents. Your information technology department must turn off the auto delete functions on your company servers. Likewise, they will have to save all data backup tapes, rather than reuse them. If an employee leaves the company, you cannot reuse his or her laptop, desktop computer or smartphone. Because antitrust litigation may drag on for years, you will need a sizable storage space.
It's a good idea to have an emergency data plan in advance, says Wrobel, director of Stout Risius Ross a suburban Detroit company that specializes in data preservation.
"It's best to have a conversation with your IT department before you get hit with a subpoena," Wrobel said. "Otherwise, your IT people will be scrambling."