The Critical Importance of Training
Recent events clearly reflect the rising tide of liability risk companies face for retaliation against a whistleblower. Surprisingly, a survey just conducted by NAVEX Global reveals that many companies have not committed to compliance training. Such training is critically important given recent regulatory and legislative developments, and the specific contours of a robust training program are examined in this article.
Liability risk for companies across America for compliance-related errors or omissions is rising dramatically.
Just in the last three months, we have seen a jury verdict in a whistleblower retaliation case result in over $10 million in damages. In addition, the SEC continues to issue a steady stream of “bounty” awards to individuals who identify fraud or wrongdoing in the workplace, including a $61 million bounty awarded in July 2017. More than ever, now is the time for companies to commit to compliance and to foster a transparent environment where individuals will come forward, knowing that their problems will be investigated and that they will not suffer any retaliation for raising an issue.
Bathed in this light, it is surprising and disturbing that a new survey strongly suggests that many companies are not investing in training on ethics and compliance.
The survey, conducted by leading compliance software firm NAVEX Global, found that 25 percent of nearly 1,000 compliance professionals reported that their organization does not even have a dedicated budget for training and that well over 90 percent don’t bother to track the return on investment for training. The survey also found that — for the first time since NAVEX Global has conducted this type of research — the stated reason for training was not “creating a culture of ethics and respect” but rather “complying with laws and regulations.” Also notable: the survey reported that training for board members fell from 58 percent to 44 percent.
These results are disturbing on a number of levels. First, numerous federal agencies are expressly urging employers to commit to training. In the past year, both the Department of Labor and the Equal Employment Opportunity Commission issued recommended guidelines strongly encouraging employers to conduct anti-retaliation training; those agencies have expressly indicated that a commitment to such training will be considered in assessing penalties should an individual experience retaliation. Second, certain states like California have recently passed legislation mandating that employers conduct training. Third, recent high-profile news reports such as the one involving Uber suggest that workplace cultures would benefit from enhanced training to foster transparency, respect and a commitment to refrain from retaliating against those who raise issues.
Employers contemplating training should strongly consider a robust investment in the training process. A seasoned approach to compliance training involves starting at the top with training of the board and the C-suite. Once leadership training is complete, organizations absolutely must engage in training of managers so they can understand evolving concepts like what constitutes “protected activity,” what is an “adverse action” and the critical role front-line managers play in the process of responding to employee concerns and ensuring they are investigated.
Another component of training is to provide all employees with enhanced awareness around how they can voice their concerns, what the organization will do to investigate such concerns and a strong message that the company will not tolerate reprisals for good faith concerns. Finally, once an organization has invested in the training process, it is critical to track return on that investment. One meaningful approach is to hold senior leadership and front-line managers accountable by measuring their commitment to compliance and issue resolution as part of their annual performance evaluation metrics.