Companies in the cannabis industry are not immune from trends experienced by employers in other industries. From harassment lawsuits to white-collar investigations, employers are facing a multitude of claims – especially as state and federal employment law continues to evolve. As the industry grows, cannabis employers will begin to confront similar challenges. This is especially true with respect to workplace investigations in the #MeToo era, although cannabis executives may encounter greater scrutiny due to the evolving law and disparities between state and federal law.

Participating in a workplace investigation, whether you are the subject of that investigation, the accuser, or a witness, can be an intimidating and stressful process. During my career, I have represented numerous high-level Silicon Valley executives in investigations where they were either the subject of an investigation or a key witness involving allegations of workplace harassment, discrimination or retaliation.  Whether it is a high-profile investigation, or one that receives no public attention, the stakes can be high given the potential implications of the investigation results on the executive’s career and reputation.  The importance of retaining separate counsel to represent an executive in a pending workplace investigation cannot be overstated, even if initially it does not appear the executive is a target of that investigation. The executive’s reputation and the company’s overall success could possibly be on the line.

Below are important reasons why cannabis executives should retain his or her own attorney during a workplace investigation. 

Company’s Interests v. Executive’s Interests

It is important for the executive to recognize that the company has interests separate from his or her own personal interests.  Typically, those interests align when times are good and when the working relationship is productive.  However, in the context of workplace allegations, the interests of the company and the executive may diverge. 

It may be tough for a cannabis executive to accept, but the company is not obligated to protect the executive’s reputation or career, even if the company is the product of years of hard work in a highly regulated industry.  It may be difficult for an executive to recognize when the company’s interests conflict with his or her own interests, and the company may make decisions during an investigation to protect its interests that are not anticipated by the executive.  This is especially true in the context of high-profile investigations, when the company may be concerned about publicity or shareholder reaction. 

An attorney solely representing the executive’s interests is often in a better position to identify when the company’s interests may conflict with those of the executive. The attorney may then develop a strategy to protect the executive under the circumstances and guide the executive through the process. 

Preparing for the Interview

Before sitting down for an interview with the investigator, it is helpful for the executive to meet with his or her own attorney to review the facts, gather and organize any evidence, and focus on the relevant issues of the investigation.  Investigations may be unsettling for an executive in any industry, but especially so in cannabis given the uncertain legalization status and disparities between state and federal law.  An attorney, armed with the requisite knowledge of the industry and legal landscape, will provide the executive with an objective and dispassionate analysis of the situation to better prepare for the investigation interview. 

The attorney should work with the executive to develop and articulate his or her story to the investigator in an effective and persuasive manner.  This may involve compiling all relevant evidence for the investigator, highlighting certain evidence or statements for the investigator’s attention, or preparing a chronology to help organize events or link important factual developments. 

An experienced attorney will also prepare the executive for any potential or anticipated questions the investigator may ask.  It is important to involve an attorney early in the process to ensure supporting evidence is appropriately preserved and presented to the investigator, and to avoid the potential for admissions or other statements by the executive to the company or the investigator without the benefit of counsel. 

An executive should not take a “wait-and-see” attitude when it comes to workplace investigations before engaging an attorney, especially when the executive is the target of workplace allegations.  If the executive waits to retain an attorney, that attorney may be forced to engage in damage control, rather than take a proactive approach that comes with early involvement in the matter.       

Liaison with Investigator

An effective attorney representing an executive during a workplace investigation will act as the executive’s liaison with the investigator to facilitate the investigation process.  Rather than take an adversarial role, the goal of the executive’s attorney is to provide the relevant information to the investigator to make his or her job easier and to allow the investigator to reach the correct conclusion in a light most favorable to the executive.  The attorney should convey the executive’s story to the investigator and advocate the executive’s interests. 

An effective attorney will also attempt to build rapport with the investigator.  An attorney who develops a good rapport and credibility with the investigator is typically more effective in asserting concerns on behalf of the executive when necessary.  As an employee of the company, the executive has a general obligation to cooperate with the company’s investigations.  Balancing that cooperation with protecting the executive’s interests is the job of the attorney, and acting as the liaison with the investigator is critical to that effort. 

Negotiate an Exit Strategy…If Needed 

If it appears the investigation will lead to the executive’s exit from the company, the attorney is well positioned to shift the focus from the investigation to negotiating a favorable exit.  Depending on the circumstances, the attorney may even initiate discussions with the company regarding a separation agreement as part of an overall strategy to protect the executive’s long-term interests.  Through a separation agreement, the attorney may negotiate terms that help protect the executive’s reputation, future employment prospects and equity holdings with the company. 

Even if the investigation does not result in a recommendation to remove the executive, the executive may nonetheless want to take the opportunity to leave the company voluntarily under favorable terms and circumstances.  This may happen when, as a result of an investigation, the executive’s duties or reporting obligations change in a way that makes remaining with the company less attractive.  The attorney may help make the best out of a difficult situation through effective exit negotiations.

Conclusion

To executives, their image is their brand, or in some cases, their selling factor, and that image is built upon a reputation for success and hard work. An executive’s reputation is important in any industry, but especially in one that is small and quickly growing like cannabis. There are only so many licensed cannabis businesses in the marketplace, and an executive’s reputation may mean the difference between sustained success and going out of business.

As we have seen in recent years – largely from the #MeToo movement – there can be increased pressure on companies or organizations to break ties with executives. If you find yourself in the middle of a workplace investigation, having your own counsel ensures that you have an advocate on your side, arguing on your behalf and guiding and protecting your interests through the investigation