Government Requests for Records: What Small Businesses Should Do First

Small businesses often collect sensitive information about customers and employees. Releasing it without understanding your obligations can create legal exposure, damage trust, and in some industries trigger additional regulatory penalties. At the same time, ignoring or delaying a valid request can also create legal trouble.

This article explains how different types of requests work, why sharing sensitive information too quickly is risky, how to train your staff to respond appropriately, and what your first steps should be when you receive any request for records.

The Most Common Types of Requests for Information (and Why They Matter)

Small businesses typically see three types of government requests for customer information:

• Informal calls, emails, or knocks at the door (“Can you send us records by end of day?”): These can feel urgent, but they may not be legally binding. They still deserve attention, but you usually have time to verify details first.
• Subpoenas (a formal request for documents or testimony): A subpoena for business records is more serious and usually comes with deadlines. You may be required to produce certain documents, but that doesn’t mean you should send everything – only produce what the scope of the subpoena requires.
• Warrants (typically used by law enforcement): A warrant generally allows officials to obtain specific information or property under legal authority. This is not something you should try to “handle casually” at the front desk.

Each carries different requirements and deadlines. Knowing what you’re dealing with (and resisting the urge to comply immediately) helps protect your business and your customers’ privacy.

How to Respond Correctly to a Request for Records

Responding doesn’t mean saying “yes” right away. It means:

1. Verifying the request in writing so you know where it came from and what it authorizes.
2. Confirming the scope — exactly which records are requested and for what period.
3. Taking time to consult an attorney immediately before producing anything. If possible, have the attorney come over to review the request.
4. Providing only the records specifically covered by a valid subpoena or warrant.

Sharing more than necessary — or responding without verification and legal review — can create problems, including:

• Disclosure of private or confidential customer data that exceeds what the law requires.
• Violation of contractual obligations you have with customers or vendors.
• Breach of your own privacy policy or terms of service.
• Damage to customer trust and brand reputation.
• In certain industries, regulatory exposure.

In healthcare settings, for example, HIPAA protects patient health information. Releasing protected health data without clear legal authorization can lead to additional legal risks and licensing penalties beyond the original request.

What Not to Do With Your Customer or Employee Records in a Rush

Reacting quickly under pressure is often when mistakes happen. Avoid these common missteps:

• Don’t hand over records immediately just because someone claims to be with a government agency.
• Don’t send all files when only a narrow set was requested.
• Don’t edit or delete records if you anticipate a legal request, as that can create legal exposure or accusations of spoliation.
• Don’t guess about whether the request is valid — verification matters.
• Don’t assume you know what the request covers.

An important best practice: consult an attorney immediately when a serious request arrives. Ideally, your attorney should review the actual subpoena or warrant before you produce any information. If possible, arrange for the attorney to come onsite or conduct a rapid review of the document and its scope. This helps you understand your obligations and limits before turning over sensitive records.

Training Your Employees for When A Government Request for Information Comes In 

Many requests start with a casual conversation. Someone in HR, customer service, or IT might get a call or email saying “can you help us with customer info?”. Employees who respond without training can accidentally create risk by:

• Giving out passwords or access.
• Trying to interpret agency names and authority.
• Agreeing to send files without verification.
• Deleting files that “look questionable”.

Training helps employees know to never share information or agree to a request on the spot and refer all requests to a designated compliance lead. It might be a good idea to create a simple internal policy that says: all legal or government requests must be forwarded to management and reviewed with counsel before any response.

Questions SMBs Should Ask Before Handing Out Customer Information

Before you make any decisions, ask yourself a few key questions to reduce risk and stay in control:

• Is this request legally valid and who is it from? Do I have the agency name, contact details, and a written request?
• What exactly are they asking for and what’s the deadline? Is it limited to specific customer records, dates, or transactions?
• What are we required to share, and what should we avoid sharing? Does the request include sensitive data we should protect or minimize?
• Do we need to notify the customer or preserve records immediately? Should we freeze deletion schedules or limit internal access until resolved?

These questions help you slow down and respond thoughtfully—without ignoring the request or creating unnecessary exposure.

What to Do Next to Prepare for When The Government Demands Information

To respond responsibly and protect your business, take these practical steps:

1. Arrange for legal representation before you need it. 
2. Understand the types of records and information and your legal obligations to protect each. 
3. Train your staff and update your policies.

You don’t need to panic when a government request comes in. With a clear process and the right support, you can stay compliant, protect customer trust, and keep your business steady.