Skip to main content
A Better Partnership

Publications

Sep 2012
06
September 06, 2012

Could Your Employees Be Engaging In Commercial Bribery?


When we think of bribery, we generally think of a shadowy figure passing an unmarked envelope of cash to a politician or judge. Bribery, however, is not limited to just government officials. The federal government has enacted laws that make it a crime for businesses operating in the United States to bribe foreign officials in an attempt to obtain favors or favorable treatment. Many states followed suit by enacting laws that make it a crime for an employee to accept or offer benefits in order to obtain or retain business. Whether you are a large multi-national corporation or a small business owner that sells in multiple states, commercial bribery is a potential issue.

Legislation on international bribery, such as the Foreign Corrupt Practices Act or the United Kingdom’s 2010 Bribery Act, has received significant media attention in recent years, but many states, including California, Nevada, Washington, Texas and New York, have enacted similar legislation aimed specifically at commercial bribery. These state laws have received much less media coverage, but in many ways could have a larger impact on the day-to-day functions of a business. These laws generally prohibit the following:
 
  • An agreement where an employee offers or accepts some form of benefit;
  • The benefit is offered or accepted without the consent or knowledge of the employer; and
  • The gift is offered or accepted with the understanding that the person receiving the gift will use his/her influence to benefit the person giving the gift.

Some states require a minimum amount of money to change hands in order for the activity to qualify as commercial bribery. For example, California law states that the commercial bribery statute does not apply unless the benefit exchanged is worth more than $250.

These laws clearly cover backroom deals between corrupt companies, but they can also reach more common occurrences such as a company salesman paying for several rounds of golf for employees of a prospective customer. Anytime an employee offers or accepts a benefit from an existing or potential client, commercial bribery statutes may be involved. If a gift is given or received by a rogue employee, it can have effects that ripple throughout the company.

The good news is that potential problems with commercial bribery can be managed. One option a company has to protect itself and its employees is to create a policy and system where employees are required to disclose gifts or other benefits they give and/or receive from outside the company. The policy should also set limits on how much an employee can receive from a single vendor. A system like this allows a company to monitor which employees are giving and receiving gifts, the amounts and sources of the gifts and can identify potential problems before they become real problems. Having this kind of system in place can help protect unwitting and well-intentioned employees from getting into questionable situations as well as help protect the company from employees with more dubious motives.

If an employee is charged with commercial bribery, it will harm both the employee’s individual career and the reputation of the company. Taking appropriate steps now will ensure that a company is better equipped to protect itself and its employees.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.

ACCEPTCANCEL

Text

+ -

Reset