The Yates Memo: What it means for your Compliance Program

The Yates Memo was written by Deputy Attorney General Sally Yates and was issued on September 9th 2015.  The memo outlines guidelines for Department of Justice (DOJ) attorneys, specifically relating to the definition of cooperation credit for corporations.  The memo largely calls for increased transparency regarding individuals that are accused of wrongdoing.  The Yates Memo encourages DOJ attorneys to focus their attention on the individuals responsible for wrongdoing, as opposed to solely focusing on the organization as a whole.

The Yates Memo set out six steps that are intended to guide all DOJ actions.  These are:

  1. To be eligible for any cooperation credit, corporations must provide to the DOJ all relevant facts about individuals involved in corporate misconduct.

  2. Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.

  3. Criminal and civil attorneys handling corporate investigations should be in routine communication with one another.

  4. Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals.

  5. Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be Memorialized.

  6. Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.

In the memo, Deputy Attorney Yates specifically cited the False Claims Act (FCA) as an example of the application of the new policy.  She stated that to receive credit for cooperating fully under the FCA and trigger its reduced damages provision, an entity will now be required, at a minimum, to reveal all relevant facts about responsible individuals.[1]

The Yates Memo advises that a corporation’s best protection is a proactive and robust approach to compliance and ethics programs.  This includes:

  1. Documentation that demonstrates the corporation’s commitment to operating the corporation in compliance with all relevant regulations;

  2. Management support of compliance efforts;

  3. Implementation of means to identify and promptly respond to any suspected compliance issues; and

  4. Communication of compliance efforts, even up to the governing board level.