Internal Investigations by Businesses
When a business is confronted with evidence or allegations against an administrator or employee of wrongdoing, it should respond deliberately, thoughtfully, and promptly. Gathering all the facts is essential. To do this, a thorough internal investigation should be conducted. Such investigations are important in a variety of circumstances, including claims of sexual harassment, inappropriate forms of behavior or communication, accounting or other fraud, and workplace injuries. The more information a business has about potential liability, the easier it will be to respond when and if such claims blossom. In addition, a proper investigation and response to information learned therein protect the business from claims that it callously turned a blind eye to workplace misconduct. The business must identify all sources of facts, obtain and document information from those sources, draw reasonable conclusions, and take swift action. Document collection and review, witness interviews, and careful analysis of the information provided from those sources are important components of any internal investigation.
Investigations should be conducted objectively. Ideally, internal investigations should involve an attorney. Not only will a lawyer presumably be objective, retaining a lawyer provides the protection of the attorney–client privilege. With some limitations, putting a lawyer in charge of investigations will shield communications that can be harmful to the business. Retaining a lawyer allows a business to obtain and act upon potentially negative information without the risk of being compelled to testify regarding the communications. Maintaining confidentiality may also encourage people to be more forthcoming with information. When a lawyer is not used, the individual conducting an investigation should not be a supervisor of the complainant or the subject of the complaint. It is important to avoid the appearance of bias or improper interest in the matter. The person investigating should also be familiar with the issues involved and the potential legal consequences.
Interviewers should ask open-ended, non-leading questions in order to obtain the most candid and accurate information possible. For the same reasons, each interviewee should be interviewed separately. It is important to keep detailed and dated notes that document all facts collected. Notes should include the duration of each interview. If possible, interviewees should affirm in writing that the information recorded is accurate. It is generally beneficial to have two people conduct each interview so the information obtained can be corroborated if necessary. All documentation should be maintained in a centralized filing system. This will enable the business to link incidents that may initially seem unrelated. Documentation should be kept confidential to the greatest extent possible and the investigation should only be discussed with those who must know about it. Interviewees should also be instructed not to discuss matters covered in the interview with others.
When the investigation is concluded, it is important to determine what action should be taken. The business should promptly resolve any inappropriate conduct. In determining what action to take, consider the credibility of the complainant, any relevant prior conduct and discipline, the egregiousness of the wrongdoing, knowledge of applicable company rules, and how any similar offenses were resolved in the past. Remedial action may include moving personnel to different locations, terminating the wrongdoer and/or implementing an education program to prevent similar conduct in the future. Any action that is taken should be documented. So too should the rationale about why said action is being taken. This serves to memorialize the business’ good faith, reasonable response and can protect management against allegations of complicity.
A complainant should also be informed of any steps taken to rectify the situation. The manner in which a company responds to a complaint will often dictate whether a complainant decides to file a lawsuit. For this reason, the complainant should be informed that the business takes the allegation(s) seriously. Do not ignore the complaint or joke about the incident. Do not retaliate against the complainant, and inform employees that retaliation will not be tolerated.
When confronted with evidence or allegations of wrongdoing, obtaining complete information as early as possible is crucial. It can be difficult to determine how to respond without having all of the facts. A properly conducted internal investigation can ultimately save money, reduce exposure to litigation, and insulate managers from allegations of complicity.