2019

Global Test Systems Supplier Uncovers Ethics Violations, Favorably Settles Employment Dispute

Asia | Asia - China

A global supplier of test systems and industrial position sensors uncovered massive ethics violations through an internal investigation conducted by Faegre Baker Daniels. Initially launched by a whistleblower’s tip alleging Foreign Corrupt Practices Act (FCPA) concerns, the investigation ultimately found that the entire management team overseeing its Chinese subsidiaries had established and invested in a competing business.

At the conclusion of FaegreBD’s investigation, around 30 employees were terminated, and civil and criminal actions were pursued, in cooperation with Global Law Office, against several former employees for non-compete and trade secret violations.

Seven terminated employees later sued the supplier for more than $1 million. However, FaegreBD attorneys developed a negotiation strategy that enabled the case to settle for less than one-fifth of their demands. FaegreBD continues to provide legal counsel to the supplier on various other matters, including reviewing the employee handbook, managing an investigation by the Administration of Industry and Commerce in Beijing, investigating alleged employee corruption in north China and dawn raid training for China-based employees.

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