How would you respond to a staff member who called to report that a company facility was receiving an unexpected government inspection? The agents could represent federal or state environmental, health and safety or taxing authorities. Almost certainly they will be requesting access to your company’s facility or offices in short order, perhaps immediately.
Is your staff trained to respond to government inspections?
Responses are many and varied. Some employees would try to placate the agents and answer their questions to the best of their ability. Other employees might become defensive and refuse to cooperate. Still other employees might panic and open the doors and the books to the regulators without any prior preparation or authority to do so. Sometimes you can buy time – and perhaps convince the inspectors to return on another day – so you have time to prepare. Sometimes you cannot; you must conduct the inspection on the day and time when the inspectors arrive at your facility.
The response you receive from the agents will likely be directly related to the reaction and attitude they receive from you and your employees. An open and honest attitude – while not volunteering information not requested – may be a good way to disarm the inspectors and shorten the inspection, particularly if your facility complies with the laws and regulations the inspectors have come to check on. It’s important to ask the agents the purpose of the inspection so you have some idea of what the government is looking for and whether the requested information will raise red flags about your operations.
In some circumstances, an open response may not be appropriate because critical manufacturing schedules must be met or known non-compliance exists. In those instances, it may not serve you well to follow the observations set forth below. If the government’s regulatory action is particularly hostile, you may need to use a more aggressive response. In those instances you may want your staff to remain quiet until your attorney can make a proper inquiry and prepare a proper response.
Handling Government Inspections
The following are general observations. They will apply in some cases, and not in others. You should seek the assistance of legal counsel whenever you confront a government inspection or audit.
- Make an Effort. Unless you have a reason to prevent a government inspector from entering your facility – and, in light of the scope of her legal authority, it should be a very good reason – make it easy for the inspectors to gain access to and inspect your facility. If you or another corporate officer – like the chief operations officer or general counsel – must travel from headquarters to the facility being inspected, then do so. It may be an inconvenience, but it will set a respectful tone with the inspectors. In particular, if there is nothing substantial at stake, do not ask the inspectors to travel a greater distance to the company’s offices if the subject facility is close by. It says a lot to the inspectors when a company officer travels to the facility for the inspection. If possible, try to avoid the inspection becoming adversarial. If you make an effort, even a small one, to cooperate when you can, it will usually pay off many times over.
- Concede Easy Issues. Concede the issues that are of no real importance to your company to show the government’s inspectors that you want comply with the appropriate regulations. You do not have the time or money to “make a federal case” out of a small issue. So it should not be a big deal to agree to comply with some of the inspector’s minor suggestions. This approach will set a positive tone when the time comes to rationally discuss the larger issues the government may wish to raise This also keeps you from looking defensive. Again, this may not be appropriate in all circumstances, but where the government inspectors do not approach you with an indicting attitude or agenda, this should be an entirely acceptable response in many instances.
- Be Agreeable When You Can. Try to set a pleasant tone from the first moment you meet the inspectors. Warm handshakes, smiles, and deference to the inspectors’ authority help establish a non-adversarial setting. There are a couple of adages a government inspection should bring to mind. When you’re communicating with the inspectors, whenever you can try to go along to get along. Inspectors have a job to do. If there are no issues, don’t create any through your behavior. As is true in most of life, you will catch more flies with honey than with vinegar. Make an effort to be respectful, sociable and kind in your interactions with the inspectors. Occasionally, the effort is not returned and may be wasted. As a general rule, being agreeable pays off time and time again.
- Answer Only Questions Asked. This can be hard to get used to if you have never spent time as a litigator. It is, however, an important lesson to practice whenever an inspection takes place. You can almost count on only getting into trouble if you don’t keep your communications clear and concise when there is any possibility your comments could be used against you. This is a good point to remember not just in the context of a facility inspection, but also in nearly all legal situations that arise in the workplace. Try to keep this in mind, and take pains to teach it to your less experienced employees as well.
- Respond Quickly Where Possible. If the government inspectors ask the company to complete a relatively easy task during the inspection, try to comply as quickly as possible; the same day is ideal. You may also want to ask the inspector how the company can demonstrate compliance. This will position you as being cooperative and conscientious regarding the company’s regulatory obligations.
Again, responding to a government inspection does not lend itself to one-size-fits-all advice. If that were true, very few attorneys could make a living offering legal counsel to clients since all the advice would be the same. Also remember that responding to issues that arise during a government inspection sometimes just requires a little common sense. It can’t, however, hurt to have the above principles in mind so that when a random government inspection occurs, the advice is close enough to the top of your mind to be remembered and used.