DOJ policy changes regarding cooperation of business entities and pursuit of individual defendants



United States Publication February 2019

Deputy Attorney General Rod Rosenstein recently announced changes to the US Department of Justice’s (DOJ) policy on the cooperation of corporations and the pursuit and potential release of individuals involved in corporate misconduct. These changes are largely aimed at aligning available DOJ resources with the government’s goals of pursuing those individuals most substantially involved in alleged misconduct as opposed to any and all individuals, regardless of their position or relative culpability. Consistent with these goals, the DOJ lowered the burden on corporations with respect to what must be disclosed regarding individuals involved in alleged wrongdoing before a corporation can be entitled to cooperation credit. 

The changes mark a split from prior policies that treated criminal and civil cases the same and create different levels of required disclosure as to individual misconduct in civil and criminal investigations before cooperation credit for the corporation can be considered. With the changes, the DOJ also returned certain discretion to DOJ attorneys in negotiating releases of individuals in civil matters and declining to investigate or pursue certain potential civil defendants. The prior policies and Rosenstein’s recent changes are explained in more detail below. 

The Yates Memo

On September 9, 2015, then-Deputy Attorney General Sally Yates released what has become known as the “Yates Memo.” This Memo addressed and revised the DOJ’s policy regarding individual accountability for corporate wrongdoing. In addition to pursuing corporations, Yates stated the DOJ believed “[o]ne of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.” Yates reasoned accountability “deters future illegal activity, it incentivizes changes in corporate behavior, it ensures that the proper parties are held responsible for their actions, and it promotes the public’s confidence in our justice system.” Yates recognized, however, that assessing culpability and proving the intent of individuals in large corporations can be difficult and often requires the review and analysis of burdensome amounts of corporate documents. Accordingly, Yates announced that the DOJ would implement certain policies in an effort to “fully leverage its resources to identify culpability individuals in corporate cases.” 

Those policies, which are discussed in detail in the Yates Memo, are summarized as follows: “(1) in order to qualify for any cooperation credit, corporations must provide to the [DOJ] all relevant facts relating to the individuals responsible for the misconduct; (2) 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 or approved departmental policy, the [DOJ] will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation; (5) [DOJ] attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and (6) civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.” The Yates Memo was clear that each of these policies was intended to apply with equal effect to both criminal and civil matters. 

Changes to the Yates Memo

After several years attempting to implement the Yates Memo, Deputy Attorney General Rosenstein announced that the DOJ had conducted a thorough review of its policies regarding the pursuit of individuals in corporate wrongdoing. In a speech delivered November 29, 2018, at the American Conference Institute’s 35th International Conference on the Foreign Corrupt Practices Act, he announced several important changes to the DOJ’s policies, and, in particular, policies set forth in the Yates Memo. 

Before announcing the changes, however, Rosenstein clarified that the revised policy still made “pursuing individuals responsible for wrongdoing ... a top priority in every corporate investigation” conducted by the DOJ. Thus, consistent with the Yates Memo, Rosenstein explained that “absent extraordinary circumstances, a corporate resolution should not protect individuals from criminal liability.” The DOJ continues to believe that “[t]he most effective deterrent to corporate criminal misconduct is identifying and punishing the people who committed the crimes.” The changes he announced would therefore be made in the manner in which the DOJ pursued corporate and individual investigations and their resolution of civil matters, not the DOJ’s overarching goal of holding both businesses and individuals responsible for criminal misconduct. 

Lowered required disclosures for cooperation credit

The first key change Rosenstein announced adjusted the policy with respect to how much information regarding individual misconduct corporations must disclose to be considered for cooperation credit. Under the Yates Memo, the company was required to “completely disclose to the [DOJ] all relevant facts about individual misconduct” and “identify all individuals involved in or responsible for the misconduct at issue, regardless of their position, status or seniority.” (emphasis added). Absent such complete cooperation and disclosure, the company would not be entitled any consideration for cooperation credit. This applied with equal force to both criminal and civil matters. And Yates clarified specifically that under the False Claims Act, the DOJ’s position was “that, at a minimum, all relevant facts about responsible individuals must be provided.” 

Recognizing that this policy resulted in burdensome levels of disclosure that often impeded the progress of investigations, Rosenstein announced that companies seeking cooperation credit in criminal cases must only “identify every individual who was substantially involved in or responsible for the criminal misconduct.” (emphasis added). This change was made “[i]n response to concerns about the inefficiency of requiring companies to identify every employee involved regardless of relative culpability.” As a result of these concerns, the DOJ found that the policy was not being enforced in all instances because of its tendency to impede resolutions and waste resources. Rosenstein explained that “investigations should not be delayed merely to collect information about individuals whose involvement was not substantial, and who are not likely to be prosecuted.” The DOJ now wants “to focus on the individuals who play significant roles in setting a company on a course of criminal conduct,” including specifically those who “authorized the misconduct, and what they knew about it.” 

Next, in a significant departure from the Yates Memo, Rosenstein recognized that “civil cases are different.” The Yates Memo stated that the DOJ’s “civil enforcement efforts are designed not only to return government money to the public fisc, but also to hold the wrongdoers accountable and to deter future wrongdoing.” The Yates Memo described these “twin aims…of recovering as much money as possible…and accountability for and deterrence of individual misconduct” as “equally important” in civil enforcement. Thus, the Yates Memo was clear that its guidance applied with equal force to both civil and criminal investigations. 

Unlike Yates, Rosenstein stated that “[t]he primary goal of affirmative civil enforcement cases is to recover money.” Accordingly, the DOJ has “a responsibility to use the resources entrusted to [it] efficiently.” For that reason, “[w]hen criminal liability is not at issue, [DOJ] attorneys need flexibility to accept settlements that remedy the harm and deter future violations, so they can move on to other importance cases.” The new policy therefore only requires that companies in civil cases “identify all wrongdoing by senior officials, including members of senior management or the board of directors, if it wants to earn any credit for cooperating...” (emphasis added). Further, “[i]f a corporation wants to earn maximum credit, it must identify every individual person who was substantially involved in or responsible for the misconduct.” This policy abolished the “all or nothing” approached that required full and complete disclosure of all individuals involved before any cooperation credit could be offered, which Rosenstein explained “delay[ed] the resolution of some cases while providing little or no benefit.” 

With respect to the False Claims Act specifically, Rosenstein explained

In a civil False Claims Act case, for example, a company might make a voluntary disclosure and provide valuable assistance that justifies some credit even if the company is either unwilling to stipulate about which non-managerial employees are culpable, or eager to resolve the case without conducting a costly investigation to identify every individual who might face civil liability in theory, but in reality would not be sued personally.

So, our attorneys may reward cooperation that meaningfully assisted the government’s civil investigation, without the need to agree about every employee with potential individual liability.

To be clear, Rosenstein explained that the revised policy did not “allow corporations to conceal wrongdoing by senior officials.” If such concealment or other lack of good faith in the company’s disclosures is discovered, the company will not be entitled to any cooperation credit. But the revised policy does lower the disclosure requirements to only those senior officials that were involved in wrongdoing as opposed to all levels of employees with any level of involvement. 

Individual releases in civil cases

Rosenstein also announced changes to the authority of DOJ attorneys to release individuals from liability in civil settlement agreements. Under the Yates Memo, DOJ attorneys could not “release culpable individuals from civil…liability when resolving a matter with a corporation…absent extraordinary circumstances.” While leaving this policy in place for criminal investigations, Rosenstein removed this high bar for civil cases and instead provided DOJ attorneys discretion “to negotiate civil releases for individuals who do not warrant additional investigation in corporate civil settlement agreements…with appropriate supervisory approval.” Rosenstein described this as a “commonsense reform” that “restore[d] to [DOJ] attorneys some of the discretion they previously exercised in civil cases.” He explained that providing this “discretion to [DOJ] attorneys is consistent with [its] commitment to hold individuals accountable in every appropriate case” based on available resources. Rosenstein stated succinctly, “The [DOJ] will vigorously and diligently pursue enforcement actions against individuals in every case where it is justified by the facts. If it not justified, we will move on.” 

Additional discretion in civil cases

Finally, Rosenstein explained that DOJ attorneys “once again are permitted to consider an individual’s ability to pay in deciding whether to pursue a civil judgment.” The Yates Memo had previously provided that “[p]ursuit of civil actions against culpable individuals should not be governed solely by those individual’s ability to pay.” Instead, the Memo directed that attorneys consider a variety of factors, including the severity of the conduct, whether a judgment against the individual could be obtained, and whether pursuing the action reflected an important federal interest. Yates stated that “[a]lthough in the short term certain cases against individuals may not provide as robust a monetary return on the [DOJ’s] investment, pursuing individual actions in civil corporate matters will result in significant long-term deterrence.” 

Rosenstein, by contrast, explains that the DOJ does “not want attorneys to spend time pursuing civil litigation that is unlikely to yield any benefit” particularly “while other worthy cases are competing for [DOJ’s] attention.” This statement is in line with Rosenstein’s departure from Yates’s view that civil enforcement has co-equal “twin aims” of monetary recovery and determent and his focus on primarily recovering money for the public fisc. Consistent with this realignment of goals, Rosenstein announced that DOJ should not waste scarce resources pursuing civil claims against individual defendants unlikely to be able to contribute to such recoveries. 


Rosenstein’s announcement reflects a shift in DOJ policy regarding the allocation of resources during criminal and civil investigations. While maintaining an overarching goal of pursuing individual defendants in both types of cases to deter and remedy corporate misconduct, DOJ’s revised policy lowers the burden on corporations with respect to required disclosure of individual involvement to be entitled to consideration for cooperation credit. The policy creates two tiers of required disclosure, with a lesser amount required for civil defendants. Further, the revised policy returns discretion to DOJ attorneys to negotiate releases of individual civil defendants with supervisory approval and to consider an individual civil defendant’s ability to pay when allocating investigative resources. Each of these reforms marks a departure from the Yates Memo’s policies and provides insight into DOJ’s view on the proper allocation of its available resources.


Recent publications

Subscribe and stay up to date with the latest legal news, information and events...