When it rains, it pours—companies confronting significant litigation or government investigations often also find themselves in business circumstances that call out for a slimmer workforce. When a new business line or product fails, when wrongdoing is discovered in a business unit or when industrywide practices come under new scrutiny, your company or client can be caught in the unenviable position of having to defend shareholder lawsuits or regulatory investigations while also trying to reduce headcount in the very business unit that generated the problem. Business leaders may unknowingly terminate employees that counsel expects to be key witnesses, or who were otherwise assisting counsel by providing relevant data or documents or explaining key systems. Such terminations can materially weaken the company’s defense, especially when defense counsel does not have advance notice of the terminations.
Reproduced with permission from Corporate Accountability Report, 12 CARE 41, 10/17/2014. Copyright 2014 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com