What is a legal compliance program? Why do you need one?

A legal compliance program is a shared good faith effort by a company and its employees to understand and comply with the numerous, and often complex, laws and regulations which affect all aspects of business operations of the company and its employees. It should be used as an integral component of a company's business operations and plans and as a guide to the company and its employees through the maze of governmental laws and regulations. A legal compliance program makes good business sense and should assist your company and employees in avoiding costly and time-consuming criminal and/or administrative investigations, as well as civil litigation, and perhaps in ultimately avoiding criminal penalties or civil liabilities when a violation of law occurs. Stated simply, a legal compliance program should assist your company in avoiding costly and time-consuming lawsuits.

A legal compliance program should be individually crafted toward the company, its employees, and the industry or business in which it competes. By avoiding civil, administrative and/or criminal investigations and litigation, your company will remain competitive and can devote its resources to its business, not litigation.

There are various laws that affect not only companies but also their officers, employees and other representatives. Liability for violation of those laws often applies not only to the company or employee but to both. The company may be liable in certain instances for the acts and omissions of its employees and vice versa. Education and cooperation between the company and its employees is critical for an effective legal compliance program. Ongoing monitoring of any legal compliance program is also paramount.

An effective legal compliance program should address specific legal issues that affect your business in addition to issues that affect every business. In identifying industry specific issues, your company should start with areas in which it is most heavily regulated. For example, insurance companies and agencies should craft their legal compliance programs taking into consideration Ohio Department of Insurance regulations. Food industry companies should take into account regulations of the U.S. Food and Drug Administration. Manufacturing and construction companies must consider OSHA and EPA regulations. Financial companies should be aware of consumer lending laws as well as industry specific standards and course of practice. These examples are certainly not all encompassing, but are offered as illustrations. Examples of issues that affect every business include employee-employer issues, work place conduct and standards, computer use and software issues, trade secret and confidentiality issues, and electronic

communication issues.

While there are no hard and fast rules to assist all companies, developing and maintaining a legal compliance program for your company will likely lead to significant cost-savings and other valuable benefits.

For more information concerning a Legal Compliance Program, please contact Scott D. Simpkins: sdsimp@climacolaw.com