As we enter 2016, adulterated food-related investigations are leading the headlines—and should be leading companies in the food and beverage industry to
ask what they can do to prevent and prepare for a potential outbreak on their watch or in their supply chain.
From ice cream to eggs, and melons to Mexican food, a recent spate of significant
adulterated food outbreaks and related criminal investigations and prosecutions have highlighted the need for companies at every step of the nation’s food
supply to be increasingly vigilant in identifying and mitigating risks relating to food-borne illness.
The Federal Food, Drug & Cosmetic Act
(“FD&C Act”) prohibits numerous acts, including introducing or receiving food in interstate commerce that is adulterated or misbranded. Depending on
the nature of the violation, the FD&C Act provides for criminal prosecutions, including for misdemeanors (for first time, unintentional violations) and
felonies (for repeat or knowing violations). Criminal FD&C Act enforcement has recently resulted in convictions and significant fines for corporations,
and sentences of imprisonment for individual executives—including a 28-year sentence for a former CEO in a case
where prosecutors were seeking life in prison.
We can expect this trend to continue, both because of the high profile these cases generate, and because of the unique role management has in responding.
For individual executives, both the FDA’s Park Doctrine and the Responsible
Corporate Officer Doctrine make it possible to prosecute certain executives even “without proof that the corporate official acted with intent or even
negligence, and even if such corporate official did not have any actual knowledge of, or participation in, the specific offense.” Combined with DOJ’s
renewed focus on high-level individual prosecutions pursuant to the recent guidance of the Yates Memo, revelation of an
adulteration or misbranding issue could present the perfect storm for executives caught unprepared.
But there are steps companies in the food and beverage industry can take in advance of a crisis to mitigate the risk one will occur, and to maximize the
chances of quickly remediating its effects if it does.
- Periodically Assess Your Risk Profile and Compliance Program. Every company in the food and beverage industry should have a robust set of
compliance tools and controls designed to identify and address risks related to misbranding and adulteration. Executives and managers at every level of the
company should understand what they are, and the company should periodically review them to ensure they are appropriate and effective, well-understood and
- Trust but Verify. It is fine to trust that your employees would never engage in the type of negligence or recklessness that is often the
cause of adulteration and misbranding issues, but only if you are taking steps to confirm that belief to be true. This should include regular compliance
training that gives employees at all levels the tools and knowledge to understand why compliance matters.
- Communicate, Enforce and Support. Employees need to hear from management that compliance matters, and see that message in action through
consistent discipline against those who fail to adhere. Only then will they feel supported in making hard decisions to do the right thing, when cutting a
corner could save time or money but increase safety risks.
- Have a Response Plan. No company sets out to put adulterated or misbranded products on the market, but all must respond when it occurs.
Accordingly, most enforcement actions focus less on the fact that an outbreak or other issue has arisen, and more on how the company and its executives
responded once they became aware of it. Having a response plan in place, and trusted advisors on call to assist, could mean the difference between
weathering a small storm and floundering at sea.
McGuireWoods’ Strategic Risk and Crisis Management
group is a cross-functional multidisciplinary team designed to help companies identify, monitor and mitigate risks across the compliance spectrum, and to
manage crisis response through a robust blend of legal, public relations and government relations capabilities. With representatives from the firm’s Food and Beverage Industry team, the Strategic Risk and Crisis Management
group stands ready to help companies and individuals navigate misbranding and adulteration risks, whether through front-end compliance efforts designed to
mitigate risks, response to an unfolding crisis or back-end efforts to remediate harm.