As leaders too-often learn, employee misconduct occurs despite the best possible recruitment, vetting, and training. Misconduct occurs in the corporate world, non-profits, government agencies, and schools. The source of the allegation and the nature of the act may vary. The report may come from another employee, a client, a vendor, or a regulatory official, and it may concern criminal activity, violation of policies, or other actions with the potential to tarnish the organization’s reputation. Regardless what was done or how you found out, a thorough investigation is required for a number of reasons.
A well-run internal investigation benefits the company in a number of direct ways. It stops the conduct, cutting off the damage. If the victim of embezzlement or other financial impropriety, you must stop the flow of money; in the case of harassment, you must stop the harassment, and create the opportunity to build a better, and more productive, work environment. In all cases, a thorough investigation demonstrates to the employees and customers that the institution takes its employees’ conduct seriously.
Failure to act may expose the institution to liability in a number of ways. If an investigation could have prevented further harmful conduct, the victims may pursue a claim against the company (including through a claim of negligent hiring, negligent supervision, or the doctrine of respondeat superior). Further, a prompt and thorough investigation demonstrates the proactive nature of the company and makes a finding of culpability and acquiescence by the company less likely should a claim be made against the company.
From a separate perspective, if the target of the investigation is terminated or suspended (subject to an “adverse employment action”), the target may retaliate by suing the company for wrongful termination (often in the form of a claim of discrimination). A well run investigation provides the basis and rationale for action against the target – enabling the company to show it had a non-discriminatory rationale for the action.
Once you decide a corporate investigation is necessary, what is the next step? Subsequent posts will address these issues, but generally, you must decide who will conduct the investigation, develop a plan for the investigation, conduct the investigation, document the investigation, and follow-up. For a thorough discussion of these issues, or if you have questions on how to best protect your company, please contact Bill Bock or Steve Runyan of our Investigation and Crisis Management Team, or one of our attorney’s here. It would be our pleasure to assist you.