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United States: Defamation Claims Increase Costs of Cooperation with Government Investigations

Screen Shot 2013-03-21 at 23.08.19Following the 2010 settlements, a former employee sued Shell for defamation, claiming that Shell’s written report falsely stated that he recommended reimbursement to contractors for payments that he knew were bribes. The trial court granted summary judgment in favor of Shell, finding that Shell had an absolute privilege (i.e., immunity) for the statements it made to DOJ. The Texas court of appeals reversed that finding on June 24, 2013, holding that Shell’s written report was covered by only a conditional privilege. Consequently, Shell is not immune from suit if the former employee can show that Shell’s actions were motivated by malice.

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Last Updated: July 26 2013

Article by J. Patrick Rowan

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Disclosing the results of a company’s internal investigation to government investigators is always fraught with potential problems. The most obvious is the danger of waiving attorney-client privilege and work product protections that would otherwise shield the internal investigation from discovery in parallel litigation. But another less-heralded danger is the risk of defamation claims by employees identified through the investigation as having participated in illegal activity. The risk associated with such claims was on display in a recent ruling by a Texas court of appeals, which held that Shell Oil Company was entitled to only a conditional privilege, and not “immunity,” for statements it made in a written report to the Department of Justice (DOJ) regarding alleged violations of the FCPA. read more

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