Analyzing Early Returns on the Yates Memo

Almost six months ago, on Sept. 9, 2015, U.S. Deputy Attorney General Sally Quillian Yates issued a Justice Department memorandum titled “Individual Accountability for Corporate Wrongdoing” (Yates Memo or Memo).¹ In the short time that the Yates Memo has been in operation, the early returns are troubling for practitioners representing both companies and individuals. Among other things, it appears that the government may be attempting to use the Yates Memo for maximum political effect—in an effort to show that individuals are being held accountable for corporate wrongdoing. In practical terms, the Yates Memo can operate to sacrifice individuals—whether or not truly culpable under legal standards required in court—as the collateral damage of corporate resolutions in which the government has considerable leverage over corporate entities. This article will explore some early experience with the Yates Memo, including how it may forecast defense counsel’s future dealings with the government on behalf of both companies and individuals, and suggest tips for practitioners to best advise clients who are subject to the Memo’s guidelines.

A full description of each of the fundamental elements of the Yates Memo is beyond the scope of this article. The Memo lists “six key steps,” some of which change existing DOJ policy: (1) to be eligible for any cooperation credit, corporations must disclose to DOJ all relevant facts about the 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; and (6) civil attorneys should consistently focus on individuals as well as companies and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.² This article will focus primarily on Items 4 and 5 above. Thus far, it appears that these two policy changes are creating some serious issues for individuals as well as companies.

Early Results