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Part I of this article series explored the legal basics of how the Fifth Amendment applies in the corporate context. Now we'll explore five cutting-edge Fifth Amendment issues affecting corporate criminal investigations—triggered by technological change and the rise of cross-border investigations.

• Former versus current: Can former employees invoke the Fifth to refuse to turn over corporate records?

As we explored in Part I, the law treats current corporate employees as "custodians" who cannot invoke the Fifth to refuse to turn over corporate records in their possession, even if incriminating. But what about former employees who still possess corporate records—can they invoke the Fifth?

The answer is that courts are split on this issue. The U.S. Court of Appeals for the D.C. Circuit and Eleventh Circuit have answered "no"—former employees cannot invoke the Fifth to withhold corporate records in their possession. In those courts' view (set forth in the D.C. Circuit's 1991 ruling in In re Sealed Case (Government Records), authored by then-appellate court Judge Ruth Bader Ginsburg, and the Eleventh Circuit's 1992 decision in In re Grand Jury Subpoena Dated November 12, 1991), the agency rationale that applies to current employees applies to former ones, too. Once a corporate custodian, always a corporate custodian. Taking the opposite view, the Second Circuit has held (as per its 1999 decision In re Three Grand Jury Subpoenas dated January 29, 1999) that former employees can invoke the Fifth Amendment act of production privilege to resist producing corporate records, reasoning that once an individual leaves the company's employ, the agency relationship terminates and any corporate records are now held in an individual capacity. (The Second Circuit took care to suggest, however, that corporate employees who are personally served with custodial subpoenas for corporate records while still employed cannot end-run the subpoena by resigning and then invoking the Fifth.) Bottom line: until the U.S. Supreme Court takes up the issue, the Fifth Amendment rights of former corporate employees will vary geographically.

This unsettled issue can be strategically important to corporate employees who may choose to resign their employment and invoke the Fifth, rather than turn over incriminating corporate documents in their possession to the government. The issue also arises civilly when a corporation that has been wronged by a former executive or employee brings a civil replevin action for return of corporate documents taken without authorization.

• Passcodes and biometrics: Can the government compel individuals to unlock their electronic devices?

The Fifth Amendment implications of decryption orders are among the most important and unsettled now percolating through U.S. courts. Because today's smartphones and computers are all equipped with some form of encryption, even when agents obtain warrants to seize and search an electronic device, their ability to get into that device is far from assured. For example, FBI Director Christopher Wray has asserted that, in fiscal 2017, the FBI successfully decrypted less than half of the devices it had authorization to search. Federal and state prosecutors are thus routinely turning to courts for orders compelling individuals to decrypt their devices by divulging or entering the passcode, or requiring production of the device contents in unencrypted form, or by authorizing the compelled use of the individual's biometric features, like facial recognition or a fingerprint, to unlock the device. Do such orders violate an individual's Fifth Amendment rights against self-incrimination?

The answer partly turns on whether a particular compelled act of decryption is "testimonial," so as to trigger Fifth Amendment rights. While the Supreme Court has yet to address the issue, the emerging view among many lower courts appears to be that compelling passcodes can be testimonial since uttering or writing down a passcode affirmatively draws on the contents on the individual's mind, but that that compelling biometric features to unlock a phone is not testimonial because holding a phone in front of someone's face or using their finger to unlock it does not draw on the person's mind. This distinction respects longtime precedent establishing that police can compel an individual's physical features, such as fingerprints, blood samples, handwriting and voice exemplars, or donning a shirt for a line-up, all without triggering Fifth Amendment concerns. But still other courts (including 2019 decisions from federal district judges in Ohio and California) insist that all forms of compelled decryption—by password, biometric, or otherwise—are "testimonial" and subject to Fifth Amendment protection, citing the vast quantities of information held on electronic devices to distinguish precedent.

But even that doesn't end the inquiry, because courts further consider whether compelled decryption, even if testimonial, is excluded from Fifth Amendment protection under the "foregone conclusion" doctrine. That doctrine, which grew out of a few sentences of the Supreme Court's 1976 decision in Fisher v. United States, deems an act of production to be outside of Fifth Amendment protection when the location, existence and authenticity of what's to be produced is already known with reasonable particularity to the government. Suffice it to say, how this doctrine applies in the decryption context is anything but a foregone conclusion.  Courts have diverged over whether, for the doctrine to apply, the government must already know just that the individual possesses the device passcode (which is not hard to show), or, beyond that, what incriminating evidence lays hidden behind the encrypted wall (which is much harder to show). Two federal appeals courts, the Eleventh Circuit and Third Circuits, have addressed the issue to date, reaching differing conclusions. Likewise, state judges have split in multiple directions. In March 2019, for instance, a majority of Massachusetts' highest court ruled in Commonwealth v. Jones that the foregone conclusion exception applies to compelled decryption (and moots a Fifth Amendment challenge) so long as the government can prove the accused knows the device's passcode; a dissenting justice criticized that approach as "sounding the death knell for a constitutional protection against compelled self-incrimination in the digital age."

At bottom, existing authority concerning compelled decryption provides little uniform guidance. However, older technology (requiring manual entry of a passcode) may provide stronger Fifth Amendment protection to employees than more current facial recognition features.

•   Is a record "corporate" or "personal"—who decides? 

While the law establishes that "corporate" records, however incriminating, cannot be withheld from the government on Fifth Amendment grounds, determining what is a corporate record can be a fuzzy exercise. The more that business and personal communications are intermingled in an age of smartphones and "bring your own device to work" policies, the greater the potential fuzziness. Consider the corporate executive who has both a business and social relationship with a corporate client and who has now come under investigation for potentially criminal dealings with that client. Are the executive's WhatsApp messages with the client on his personal cellphone "corporate" or "personal" records? The executive will want to characterize those WhatsApp messages as "personal," especially if incriminating, to avoid compelled production; whereas the prosecutor will want to pierce overbroad invocations of the Fifth as to communications that in fact are work-related and thus likely "corporate." Meanwhile, the corporation will have its own interests in being able to access work-related communications housed on employee personal devices when necessary to defend corporate interests and fulfill legal obligations. So who decides?

The answer is that a court decides—but only when a dispute ripens into a motion to compel by the government, which rarely occurs. On such a motion, the court generally will review the records in camera (outside the eyeshot of the government) and apply a functional test to determine whether a record is indeed "personal" (and properly subject to invocation of the Fifth Amendment act of production privilege) or "corporate" (and thus properly compelled by the government). The court's inquiry will consider the nature, purpose and use of the record, such as who created and had access to it, and whether it is work-related and in furtherance of the corporation's business. A "mixed" document containing both personal and corporate notations may be deemed corporate and ordered produced in its entirety or with redactions, in the court's discretion.

This is an area where corporate policies matter. Courts look to corporate policies and practices to aid their evaluation of whether records are personal or corporate. Take for example the 2015 case of Securities & Exchange Commission v. Huang, in which a federal court in the U.S. District Court for the Eastern District of Pennsylvania was asked to determine whether former corporate employees, charged with insider trading, could invoke the Fifth to refuse to turn over the passcodes to their work-issued cellphones (which they had returned to the company at the time of separation). No one disputed that the work phones themselves were corporate property. The court, however, found that the passcodes to those phones were personal records —citing to the company's policy and practice of instructing employees not to share passcodes to these devices with anyone—even the company. The court then upheld the individuals' invocation of the Fifth, finding that the personal passcodes could not be compelled by the government because they were testimonial and potentially incriminating. Bottom line: the corporation's policies were central to the court's determination of "corporate" versus "personal."

Because such issues rarely reach the court system, the corporation's policies (and employees' consent to them) are all the more important to determining the company's routine rights of access to work-related records in employees' possession. In-house counsel should review whether their corporation's policies and seek to strike an appropriate balance between respecting employee privacy rights and protecting corporate access needs to work-related communications.

• What potential Fifth Amendment issues lurk in cross-border investigations?

Corporations investigated by U.S. authorities often operate multinationally, meaning not only that will witnesses and evidence will be located abroad, but also that foreign law enforcement authorities may be simultaneously investigating. This rise of multinational investigations is testing the Fifth Amendment's reach as to corporate employees who work abroad but may face criminal charges in the United States.

This issue was front and center in the 2017 appeal of United States v. Allen—a criminal prosecution arising from investigations of the LIBOR rate-setting controversy—in which the Second Circuit vacated the convictions of two London bankers because of a Fifth Amendment violation. That case considered when testimony given by an individual involuntarily under the legal compulsion of a foreign power will taint criminal proceedings later brought against that individual in a U.S. court. The Second Circuit's ruling endorsed a broad reading of the Fifth Amendment, protective of the individual defendant.

In Allen, two London-based bank employees were subject to compelled interviews by United Kingdom (U.K.) authorities, in accordance with U.K. law. U.K. authorities (again, lawfully under U.K. law) then shared those bankers' statements with a third suspect (Robson). As it turned out, Robson later pleaded guilty in the United States, cooperated with the U.S. Department of Justice (DOJ), and testified at the U.S. criminal trial of the two, now-indicted bankers whose compelled statements Robson had earlier seen. This was the problem. The court found that by offering Robson's testimony at trial the government had violated the defendants' Fifth Amendment rights—because prosecutors could not prove that Robson's exposure to the defendants' compelled testimony back in the United States did not affect or shape the testimony Robson gave at trial against those defendants. The court dismissed the indictments outright.

Notably, the DOJ had tried to steer clear of a Fifth Amendment problem during its investigation by setting up a "wall" between its investigation and the U.K. investigation and by conducting separate interviews—efforts the court found insufficient to prevent the Fifth Amendment violation at issue. The ruling came as a blow to U.S. authorities, which argued that if Fifth Amendment protection were extended to this set of facts, then any foreign government could inadvertently or purposely "scuttle prosecutions in the United States by compelling testimony and then making the testimony available to potential witnesses or the public." The court's response: "We do not presume to know exactly what this brave new world of international criminal enforcement will entail," but "the practical outcome of our holding today is that the risk of error in coordination [with foreign law enforcement] falls on the U.S. government (should it seek to prosecute foreign individuals), rather than on the subjects and targets of cross-border investigations." The DOJ's motion for rehearing was denied; review by the Supreme Court was not sought; and Allen remains binding precedent in the Second Circuit.

What is Allen's impact? For corporations with foreign-based operations, in-house counsel should expect that during any investigation involving both U.S. and foreign authorities, U.S. authorities will be on high alert to prevent a repeat of Allen. U.S. authorities may seek to persuade foreign governmental counterparts not to compel witness interviews, even if allowed under those nations' laws, but rather to conduct interviews on a voluntary basis only. A corporation that is cooperating with U.S. authorities can help with this de-confliction by keeping U.S. authorities apprised of foreign authorities' approaches of corporate witnesses involving use of compulsory process.

• When will government pressure turn a corporation's internal investigation into an arm of the government—so as to implicate employee Fifth Amendment rights?

A final, trending Fifth Amendment issue concerns the boundary line between government conduct and the conduct of a cooperating corporation—and specifically, when corporate action can be found to have been coerced by prosecutors so as to be fairly attributable to the government, raising Fifth Amendment concerns. Take for example the common corporate practice of requiring employees to submit for interviews by company counsel during internal investigations or else face discipline (including possible termination). Ordinarily, employee Fifth Amendment rights are not implicated by such corporate action because corporations have legitimate interests in investigating potential misconduct and the compulsion comes from the employer, not the government. However, if a court were to find that prosecutors coerced the corporation into conducting that employee interview, then the compulsion effectively is government compulsion, and the employee's statements can be deemed to have been obtained unconstitutionally.

This boundary line between corporate and state action is rarely deemed crossed—which is why the May 2019 decision (United States v. Connelly) by Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York has sparked such interest. Connelly is the first notable case since 2006 to find that the government had coerced a corporate actor during a criminal investigation, triggering constitutional violation of employee rights (the earlier 2006 case was United States v. Stein, decided by another district court judge and later affirmed on appeal). Connelly and Stein share some common threads. In both, the courts found that: the corporation faced a fatal threat of indictment such that corporate survival depended upon fully cooperating with and appeasing the government to avoid indictment, and the government directed the corporation's actions to a degree that vitiated the independence or voluntariness of corporate decision-making. Thus, in Connelly, an employee's compelled interview by company counsel, under threat of job loss, was deemed a Fifth Amendment violation where the government had "outsourced" the investigation to the company counsel and micro-managed through near-daily direction how and when the company employees would be interviewed. In Stein, defendants' statements to prosecutors violated the Fifth Amendment where the government was found to have coerced the company to pressure its employees to speak to the government by conditioning payment of legal fees upon the employees' appearance and cooperation.

The practical import of these cases is that  high-pressure tactics by prosecutors in dealing with corporations during criminal investigations can come back to haunt them later. Prosecutors must take care not to turn a corporate actor into a state one. And corporations must be allowed to cooperate fully and meaningfully without surrendering their independent judgment over how to manage internal investigations and employee affairs.

—Scott Caravello, a Columbia University law student, contributed to this article.

Lisa Zornberg is a partner in the white collar & regulatory defense group at Debevoise & Plimpton. Previously, she served as chief of the Criminal Division for the U.S. Attorney's Office for the Southern District of New York.