Internal Affairs: When Situations Demand Investigation

By Rory Montez

Internal Investigations

Employers must ensure safe and productive workplaces. When employees feel that is not the case, they often complain to management. If an employee makes such a complaint, it is your responsibility to perform an investigation to determine the veracity of the claim and, if valid, to ensure a remedy.

You must respond quickly, for if employees feel their complaints are not taken seriously, it may prompt them to sue the employer for creating or maintaining a hostile workplace. Any complaints of sexual harassment or threats of violence need to be taken especially seriously, as federal and state laws require due diligence on such claims.

At times, you may suspect employee misconduct without any specific notice from an employee. For example, once stellar associates could begin habitually missing work, displaying bad attitudes and appearing unkempt. This may be cause for a substance abuse investigation. Or someone could be sending confidential proprietary information to a personal E-mail account, causing concern that one may be preparing to quit the job and leave for a competitor with an unfair business advantage.

In these cases, you have a right, legitimate need, and often an obligation to perform workplace investigations.

Internal Investigations

Before beginning any workplace investigation, it is always prudent to consult with a qualified labor attorney to seek valuable guidance and to ensure a thorough and legal investigation. Often, companies lack the time, expert knowledge and resources to conduct entirely internal investigations, especially if they entail complicated or sensitive issues. Outside corporate investigators can mitigate legal exposure by being unbiased “third parties” capable of gathering details, interviewing witnesses, claimants, and the accused, and can competently report their results to your legal counsel and even to testify to their findings, if need be, in courts of law.

In 2003 the Fair Credit Reporting Act was greatly amended through The Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”) to aid employers investigating any kind of misconduct which could cause financial harm to the company. This amendment relieves you of the need to notify employee(s) when performing background checks and investigations. While a credit report still cannot be run without an individual’s authorization, employers are once again able to perform effective workplace investigations involving any other type of information gathering deemed necessary without prior notification of the suspect(s).

Once an investigation in complete, management, with the aid of labor counsel, will need to perform several post-investigation measures to ensure the outcome of the investigation is properly documented and to underscore your company’s position on misconduct.

Once you take a stance on the outcome of the investigation, including how, if necessary, to penalize those who violated codes of conduct, you will need to inform any complainants that their issues were addressed and to let them know the company appreciates them for having brought the issues to light.

If background checks or other investigative means were used, and you decide to take adverse action against employees, you must provide written “adverse action” notices to the individuals. These are much different from those required for pre-employment applicants. A workplace investigation adverse action notice is a “summary” of the investigation report; employers are not required to provide great details, such as what sources were used to obtain information, but you need to give the cause of the investigation and to specify your adverse findings.*

Now is a good time to review your company’s policies regarding misconduct and to ensure they are clearly articulated in your employee handbook. If necessary, you can draft addenda to existing policies, and have employees sign in acknowledgement of any changes. Again, it’s worth the relatively minor expense and effort to have Labor and Employment Counsel review your policies periodically to assure they fit within all legal guidelines, and to scrutinize any changes.

Systematic, periodic, effective workplace education can aid in deterring future instances of misconduct. Such education is not only recommended, but required by law in many states including California.

In the State of California, employers can be reimbursed for providing employee training, including conflict resolution. For more information on workplace education, contact us.

For inquiries on corporate training services, including quotes, please visit Compliance Training Group , our satiric partner.

It’s our sincere desire that your workplace is free from the most serious internal problems of employee misconduct, such as theft, drugs and potentially violent behavior, and that seldom, if ever, the need for services of a professional investigation firm arises from these issues. With good policies, good labor and employment counsel, thorough pre-employment background investigations and ongoing employee training, many employers have remained trouble-free for many years. But if the need should occur, your best chance for a successful outcome is in working with the most experienced professionals who provide highly competent workplace investigations as a specialty, not as a sideline.

For more information on FCRA guidelines with the 2003 FACT Act amendment, you may refer to

About the Author

Rory MontezThe author, Rory Montez, B.A., is a Senior Forensic Research Analyst and Corporate Investigator with Diversified Risk Management, Inc, specializing in workplace investigations and complex research matters. He received a Bachelor of Arts Degree in Comparative Literature from California State University Long Beach. Mr. Montez can be reached at +800.810.9508 or

Posted in Corporate Investigations, Investigations, Legal Support, Workplace.

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