te Private Investigators Must Be Licensed To Investigate In California
December 27, 2006
By Patricia Kotze
If you terminate an employee for misconduct, and your decision is based on an investigation performed by an unlicensed private investigator, your employee may challenge the validity of the investigation. As a result, you could be subject to litigation, and possibly punitive damages.
Out of state private investigators that do not posses a California Private Investigator (“PI”) license issued by the California Bureau of Security and Investigative Services (BSIS) may not conduct any type of investigation in the State of California unless they are employed by a California licensed PI firm.
Whether they call themselves consultants, security specialists, or investigators, they are required to have a PI license. The law also applies to people who conduct corporate investigations, security inquiries, secret shopping, or anyone who makes determinations of credibility for the benefit of an employer. Even consultants who specialize in HR or financial matters, such as a Certified Public Accountant (CPA), must be licensed to conduct an investigation.
Merely possessing a designation such as Certified Fraud Examiner (CFE) or Senior Professional in Human Resources (SPHR) does not replace the required PI license in the State of California or other states across the country.
As an employer, if you retain an unlicensed, out of state PI to investigate employees, you can be sued. In civil court, any illegal acts by your illegally retained investigator are considered negligence per se. In other words, once it’s established your investigation was conducted illegally, you lose.
How to Select a Reputable Out of State Private Investigator
Most good PI firms specialize in areas such as criminal defense, forensic investigation, legal support, backgrounds, missing persons, criminal prosecution, and computer crimes, to name a few. Unfortunately, employment investigations can encompass all of these fields and more. Very few PI firms have all the required experience and expertise.
For employment-related matters, it’s critical that you identify a qualified investigator who understands the legal issues involved in dealing with employment situations. These investigations could easily result in costly litigation if not handled by experts. Below are some crucial guidelines for identifying a qualified investigator for employment matters:
- Attorney Involvement: Your information can automatically have greater protection from unwanted discovery in the event of litigation if your investigator knows the value of working with and through your legal counsel, maintaining valuable Attorney-Client and Attorney Work Product Privileges. Competent investigators know this, so those who fail to seek involvement of your legal counsel should not be retained, period.
- Law Enforcement Liaison: Before the investigation, your PI should not advise you whether or not to bring criminal charges against perpetrators. Prosecution can be quick and easy or very time consuming, complicated and costly. The decision to prosecute the illegal acts of an individual lies between you and your legal counsel and, ultimately, the District Attorney's or United States Attorney's office. Generally, the better job your investigator does, the faster your case will speed through the court system. A competent investigator will put you in the driver’s seat with the option to move successfully in either direction.
- Experience: Ensure that your investigators and any contractors they employ have the experience and qualifications necessary to competently conduct your investigation. They must know how to navigate areas that present legal minefields. One wrong move can lead to unwanted litigation, added expenses and a poor outcome. The number of years spent performing the type of investigation you need has a bearing on your investigator’s ability to bring your case to a successful conclusion. Simply put, there is no substitute for experience.
- Insurance and License: All reputable private investigators carry general liability insurance. Some states require insurance prior to issuing a license. Ask for a Certificate of Insurance and ensure the coverage is "per occurrence," not "claims-made." The law does not apply to in-house employees including Human Resources or security personnel, or attorneys at law while performing “duties as attorneys at law. A PI license is required in 42 states, and in some states, investigators may actually need a business license, too. The only states that currently do not license private investigators are: Alabama, Alaska, Colorado, Idaho, Mississippi, Missouri, South Dakota, and Wyoming. The states of Florida, Georgia, Louisiana, and Oregon have limited reciprocity agreements with California..
- References and Reputation: All reputable private investigators carry general liability insurance. Some states require insurance prior to issuing a license. Ask for a Certificate of Insurance and ensure the coverage is "per occurrence," not "claims-made." A PI license is required in 42 states, and in some states, investigators may actually need a business license, too. The only states that currently do not license private investigators are: Alabama, Alaska, Colorado, Idaho, Mississippi, Missouri, South Dakota, and Wyoming.
- Willingness to Testify: All should be ready, willing and able to competently testify in court in criminal, civil, unemployment hearings or arbitrations. Any investigator that does not agree to testify in court for you should not be retained. If the investigator is subject to subpoena or deposition, the individual hiring the investigator is generally expected to pay the investigator's fees and expenses for time spent in trial testimony and preparation for trial, even if the client did not ask the investigator to be in court. Unwillingness to testify before a court or deposition signals serious problems with the quality of your investigator, his possible lack integrity in the handling of your case, or major problems in his background which could be a source of embarrassment if required to disclose the details thereof under oath.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.
About the Author:
Patricia Kotze is Managing Partner at Diversified Risk Management Inc., Los Angeles, a full-service investigation firm specializing in labor and employment related investigations and risk mitigation consulting services. Mr. Ramos can reached at +800.810.9508 or by email .