The Yates memo threatens to undermine corporate cooperation with the Justice Department.

That’s according to a report released last week by the Chamber of Commerce Institute for Legal Reform.

The report – Department of Justice’s New Threshold for Cooperation – was written by Matthew Miner, a partner at Morgan Lewis & Bockius in Washington, D.C.

Miner says that the Yates memo, put forth in September 2015 by Deputy Attorney General Sally Yates, “seeks to leverage corporate investigations to aid the Department in its task to an unprecedented degree.”

“In so doing, the policy threatens to undermine the ability of corporations to fully cooperate with the Department,” he writes.

“As James Cole, Ms. Yates’ predecessor at the Department, recognized in remarks before the American Bar Association in November 2015, the decision on whether a corporation should self-report and/or cooperate with the government has been made much more complicated.”

Cole told the gathering — “When you play it out, it is not necessarily better for the government and it’s certainly not better for corporations and counsel.”

Cole is currently a partner at Sidley & Austin in Washington, D.C.

“As recognized by Mr. Cole and other commentators, the Department’s pivot to requiring full disclosure on individuals in order for corporations to receive any cooperation credit will likely yield a number of unintended consequences and may ultimately prove counterproductive,” Miner writes. “In many pre-Memo cases, it was a foregone conclusion that corporations would cooperate with the Department in an attempt to reach a timely and favorable resolution of the matter. The way in which the Department has now conditioned cooperation undermines the settled expectations of businesses facing government enforcement. Companies no longer know what ‘cooperation’ means, and accordingly the decision to cooperate may no longer be an easy one for corporations to make.”

“The new paradigm will also force corporate counsel to make a commitment to cooperation in the early stages of an investigation, without a full understanding of the nature and scope of potential liability the company may face,” Miner writes. “This calculus will be further complicated due to the policy’s chilling effect on the company’s ability to fully investigate and develop the factual record necessary for cooperation as officers, directors, and other employees will feel at odds with corporate interests and may be unwilling to cooperate in internal inquiries.”

“This effect may also be felt on the company’s compliance program, dissuading employees from voluntarily reporting noncompliant behavior of which they are aware for fear of unwanted attention and scrutiny.”

“Consideration of collateral risks relating to costs, attorney-client privilege, and data privacy must all be factored into the analysis at a time of uncertainty and legal risk to the company, especially when the baseline expectation for cooperation is that all facts will be turned over as to any potentially culpable individual. The ultimate result may well be that rather than encouraging corporations to provide full disclosure and cooperation with government investigations, the Department’s policy will impact a corporation’s willingness to come forward and cooperate in a criminal or civil enforcement action. After all, what benefit is there to boiling the ocean in search of facts and turning employees against one another if there is no guarantee the end result will be some form of favorable credit?”

Miner says that “although it is too soon to measure the full impact of the Department’s new policy, it is nonetheless clear that the new threshold for cooperation credit has upset the expectations of businesses historically inclined to cooperate with the government.”

“The new policy is likely to have a number of unintended consequences that will muddy what was traditionally a straightforward decision – whether to cooperate with a government investigation. By focusing so much attention on identifying culpable individuals, the new policy risks alienating personnel whose cooperation and knowledge of facts are essential to any corporate internal investigation. It may also complicate compliance.”

“For example, if company employees become reluctant to raise their hands to report transgressions for fear of drawing too much attention to themselves, the company has a greatly reduced ability to assess whether controls or existing compliance programs work, or how to improve them.”

“The ‘all-or-nothing’ nature of the new cooperation standard also risks creating even more uncertainty for corporate decisions regarding the benefits of voluntary self-disclosure of suspected unlawful conduct. The new policy has also renewed concerns about the pressure to waive attorney-client privilege. Paradoxically, in seeking to make it easier to bring cases against culpable individuals in corporate investigations, the Department has complicated the mix for individuals, the corporate community – and ultimately, for the Department itself.”