Companies voluntarily established ethics hotlines to lessen sentences under the federal sentencing guidelines. Multinationals voluntarily set up hotlines to assist them in FCPA compliance. Sarbanes-Oxley's section 301 requires that companies establish procedures for whistleblowers to report anonymously to companies' audit committees. Most companies provide multiple ways to do so, but the most common is a hotline.
Now, companies with European operations face a difficult decision: comply with Sarbanes-Oxley, or with the EU's data protection laws? Two U.S. companies have been informed by France's Data Protection Authority (CNIL) that proposed ethics hotlines are illegal there. Links to a client alert memo from Hunton & Williams and the CNIL web site follow: