In today’s world, many situations might prompt the need for an internal investigation. An employee might lodge an EEOC complaint, or an applicant may file a discrimination lawsuit. Other common issues include charges of sexual harassment, wrongful termination, or retaliation. Companies might also need to investigate alleged violations of company policies or regulatory compliance, conflicts of interest, falsification of timecards or other altered data, or criminal behavior of any kind, including substance abuse, violence, or threats against other employees. Handled incorrectly, any of these situations could escalate into bigger problems. That said, the following guidelines will help you ensure success when conducting internal investigations.

Regulations that Require Investigations

Many employee relations laws require investigations for employer compliance. Any employer who knows—or should know—about an employee issue with discrimination, harassment, threat, or safety needs to take prompt remedial action to end the problem. To determine what action to take, or to confirm the need for action, the employer must investigate the situation and ascertain the facts. Failure to investigate exposes a company to liability for any claims or lawsuits arising from the problem.

Some of the more important laws and legal situations that require investigations include the following:

  • Job discrimination laws. Civil Rights Act of 1964 (Title VII), the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and their state equivalent, such as the Texas Commission on Human Rights Act
  • Health and safety laws. The Occupational Safety and Health Administration (OSHA) requires employers to investigate problems and to prevent future similar incidents. Employers also have a duty to investigate threats and to prevent acts of workplace violence to the extent possible.
  • Drug-free workplace laws. Drug-Free Workplace Act of 1988, Department of Transportation (DOT) drug-testing regulations
  • Background and credit checks. To minimize liability for negligent hiring or negligent retention, employers must sometimes investigate employees’ backgrounds, complying with Fair Credit Reporting Act (FCRA) requirements.

How to Choose an Investigator

The right candidate must be capable of investigating objectively without bias—either real or perceived—someone who has no stake in the outcome and no personal relationship with the involved parties. In addition, the investigator needs a strong knowledge of state and federal employment laws and the ability to build rapport quickly with the parties involved. Finally, the company must consider the potential risks if the complaint goes to court and the investigator must testify.

Human Resources is a common choice to conduct internal investigations. They should have the skills, knowledge of both the laws and the company, and the ability to remain impartial. Unfortunately, HR is often perceived as aligned with management and therefore not regarded as neutral. As a best practice, companies should use an internal HR partner that is not aligned with the affected business unit; otherwise, an outside consultant would be a better option.

External HR consultants can provide all the expertise of internal HR professionals without the perceived biases. Outside consultants are also a smart option when companies lack an internal resource with the necessary qualification or the bandwidth to conduct an investigation, as well as when an investigation involves a senior leader.

In-house counsel should not conduct investigations since they represent the employer, raising questions about bias and personal interest. Furthermore, if the investigator were called to testify, company matters may become “discoverable.” Instead, in-house counsel should stay abreast of the investigation and advise the employer.

If the investigation involves high-level executives or directors and/or key regulators, outside counsel will provide the highest perception of credibility and independence. An organization may hire an HR consultant for the investigative legwork, but retain outside counsel for oversight.

Respecting Employee Rights

Employees have the right to have complaints taken seriously and thoroughly investigated if an allegation rises to that level. All employees who participate in the investigation are protected from retaliation. Employee handbooks should have policies explaining this protection and providing confidentiality in case of an investigation, to the extent possible. Employee manuals should explain that some findings and information will need to be revealed to the accused and possible witnesses on a “need to know basis.”

Additionally, handbooks should state that employees are required to participate in investigations if asked.

Private-sector employees who work in unionized workplaces have the right to union representation during an investigation that may lead to disciplinary actions. Those who do not work in unionized workplaces do not have a right to representation—legal or otherwise—even if the investigation may lead to criminal charges. Any private- or public-sector employee has a right to legal representation, but private-sector employers may decide whether to allow an employee’s attorney to attend investigative interviews.

What to Expect from an Investigation

The general goals of conducting internal investigations are straightforward:

  • Collect facts to make an objective determination
  • Lay the foundation for remedial measures, if appropriate
  • Avoid litigation, but prepare for it

At its conclusion, an investigation should deliver a final report that provides a clear record of everything that was done, a paper trail of evidence, and a summary of findings and action steps taken.

An implicit, and equally important, goal is to show the person who made the complaint that the company took it seriously and responded appropriately. Prompt action and respect throughout the investigation may help avoid litigation and damage to employee morale.

The Lindenberger Group assists in conducting internal investigations for organizations in virtually every industry. For more information or to discuss your HR needs, please contact us at 609-730-1049 or send us an email.