To catch a thief �� and other workplace investigations - includes related article

An HR manager at an electronics firm offers advice on how to conduct effective workplace investigations.

Once again you've received a report that someone broke into an employee's desk, someone keeps a gun in a locker, or there's yet another unexplained discrepancy in the warehouse. What do you do?

Human resource professionals are facing situations such as these more frequently. Even in a company large enough to have its own security department, HR will often be involved in employee and facility security issues. The HR department is just as likely to have a role in investigating theft and other types of employee malfeasance as well as reports of potentially violent employees and discrimination-based harassment.

PREVENTION AS A FIRST RESPONSE

HR professionals most often wear the "fireman's" hat-reacting to issues and emergencies that seem to flare up without warning. But the preference is to don a "Smokey the Bear" hat and prevent the emergencies instead.

Reference and background checks. Human resources plays a vital role in prevention, especially when it comes to hiring new employees. With increasing litigation related to negligent hiring and retention, HR's role in the selection process becomes critical and goes beyond addressing a poor employee fit to directly affecting the company's profits. An action against a company for negligent hiring - particularly of a violent employee - can be catastrophic.

"The theory behind employer negligence," says Ken Florence, partner with the Beverly Hills labor law firm of Swerdlow, Florence & Sanchez, "is that the employer may be negligent in hiring, if it is found that a violent employee would not have been hired if a proper background investigation had been conducted and that potential for violence could have been determined." This statement explains the importance of conducting reference checks properly.

To ensure the usefulness of reference checks, HR professionals and managers need to be willing to provide pertinent background information about former employees when called. "Too often, employers have been afraid to release vital negative information," Florence explains. "In California, at least, there is a privilege protecting the release of background information if it is given in good faith, without malice."

The HR professional should also strongly consider adding a security or criminal history check to the selection process. This check should be done by a reputable investigative firm. A word of caution here: Avoid companies that promise or offer to obtain criminal arrest records instead of conviction records. Obtaining the latter is a matter of searching the public record; securing information on the former (unless statutorily required) is illegal.

Assess your security policies regularly. I recommend a scheduled assessment of these policies and procedures for both your facility and employees. This should include identifying loss factors, taking corrective action and subsequent preventive planning. Training the managers to recognize and prevent loss will enhance your upfront efforts.

Finally, it's essential that the organization's commitment to supporting a secure and safe workplace be communicated by top management.

INVESTIGATING EFFECTIVELY

Now the question is, How do you proceed when you have taken all the preventive security measures mentioned above and still need to initiate a workplace investigation?

Should you go formal? First you must determine whether or not to start a formal investigation. In some cases, you may not have a choice. "You must investigate cases," states Florence, "that involve sexual harassment; that protect employee life, safety and health; and [that involve] other discrimination-based harassment such as race or religion." This means you must investigate any incident involving actual or potential employee violence in the workplace. With loss prevention, however, the choice to investigate is yours.

Determine the scope of the investigation. How much time and money are you willing to spend? What will you do if other unrelated activity is revealed. Are you willing to involve the police and seek prosecution if illegal activity is involved? The answers to these questions will help you set the limits of the investigation.

Decide on the extent of investigation. Once you know the scope, you must determine how deeply into the process you are willing to go. "In many cases," comments Kent Perkins, director and senior investigator for the Los Angeles-based investigative firm Allied Management Resources, "what you see as a relatively small or limited problem, is in reality the proverbial tip of the iceberg." Be prepared for the investigation to become more involved than anticipated, and be flexible in responding to information that is subsequently developed. But don't let the emerging complexity of the investigation, or the process itself, cause you to lose sight of your established boundaries.

Who does the investigative work? Once you've decided to initiate an investigation of employee malfeasance and have determined the scope and depth, the question becomes, who should conduct the investigation? It can be an employee of the company, such as the HR manager/professional or a designated executive. You could choose an attorney, either from within the company (if your situation allows) or from an outside law firm. A third choice would be to hire an investigative consultant.

In cases of sexual harassment, workplace safety and the like, generally an employee with some training or expertise in handling the specific problem - for example, the HR professional or safety engineer - is the best choice to lead the investigation. In cases of theft and other employee malfeasance, it is best to have a reputable security consultant lead the investigation for your company.

"I don't believe that an attorney should conduct the actual investigation in most situations," comments Florence. "However, I strongly recommend that an attorney working for, or retained by, the company should oversee the investigation. He or she can operate as a legal check on the process, and the relationship often preserves the attorney-client privilege throughout the investigation."

Record keeping. This is of course critical to preserving the investigation's integrity. All documents should be created in contemplation of future litigation or outside review. Wherever applicable, label documents "Attorney-Client Privileged."

CHOOSING AN OUTSIDE INVESTIGATOR

If you are facing an employee malfeasance problem such as theft or drugs in the workplace and have decided to hire an outside investigator, your selection of a reputable consultant is critical. There are a number of security consultants who can create more problems than they solve because their techniques border on or even cross the line into illegal, if not unethical conduct. In locating the most appropriate investigative firm for your situation, it is best to use your networking skills. Contact a labor attorney you know and trust for a recommendation or talk to other HR professionals and managers (don't rely solely on the consultant-provided list). In these situations, a sincere recommendation is worth its weight in gold.

Interview prospective consultants, but do your homework beforehand. Don't be fooled by fancy marketing and a good sales pitch. Familiarize yourself with the legal parameters in which an investigator can and cannot operate. Describe your situation and the parameters you have established for the investigation. Then ask the consultants to outline how they will approach the investigation. Their recommendations will tell you a lot about their style and their compatibility with you and your particular situation. Do the investigators emphasize the need for attorney-client privilege? Will their documentation stand up to litigation? "If a potential consultant is unwilling to be upfront and share processes and documentation," notes Perkins, "or tries to hard-sell you more than you want, you should question whether this is the right person for your investigative team."

FIVE LEGAL WAYS

TO OBSERVE EMPLOYEES

There are many methods an investigator can use in an employee investigation. There are, however, only five ways an investigator can legally observe an employee. These include electronic, stationary, and moving surveillance; the use of undercover operatives; and investigative interviews.

1. Electronic surveillance involves photographic or video images taken in the workplace or public areas. These can be obvious camera installations such as you would find in a bank, or hidden cameras recording an open warehouse or work area. This method does not include tape-recorded voice surveillance or photographic images in areas where there is a reasonable expectation of privacy such as a restroom or an individual's home. These types of electronic surveillance generally violate privacy rights.

2. Stationary surveillance covers everything from a manager watching a manufacturing line to an investigator hidden in a car or van watching an exit door. To protect privacy, the same restrictions apply here as for electronic surveillance.

3. Moving surveillance involves following a subject from point to point either on foot or in a vehicle. The same rules apply for proper and legal surveillance. Moving surveillance covers more ground and allows for traveling outside the work site.

4. An undercover operative stationed in the workplace can be effective in some circumstances. But more risk is involved, both financial and operational. "You should question the intent of any investigator who recommends undercover surveillance as the only way to go," warns Perkins. "It is very time consuming and expensive, and should be used only when the circumstances dictate its use." For example, an outside construction site or an open loading dock may be best handled this way because other methods can't be used. There is also the potential for severely negative employee reactions if the operative is "found out." A "spy" discovered in the workplace will do much more harm to a company's employee relations than if the other methods are revealed.

5. The investigative interview, while not strictly a surveillance technique, is a vital direct-contact way to gather information. Through this method, a company's case can be made or broken if disciplinary action is taken as a result of the investigation's findings. The investigator compiles information gathered via one or more of the methods described, and possibly from other interviews. He or she then meets with the employee. It is here that the investigator's interviewing skills and expertise come into play.

"The wrong word or phrase can destroy the company's case," warns Perkins. "It is important that the entire interview adheres to all of the applicable provisions of existing labor and case law." That means the interview is voluntary, there is no coercion throughout the process, the employee is made comfortable and given access to a phone, and is allowed to take a break upon request. Even though an employee does not have a Sixth Amendment right to be represented in an investigative meeting, such a right may exist under a collective-bargaining agreement. In any event, a competent investigator will offer the employee the opportunity to call or be represented by an attorney and will be willing to conduct the interview with one present.

Tape-recording the interview. A successful interview should result in a sworn written statement, as well as a recorded statement made in the presence of a company representative.

The main purpose of a tape recording is to preserve the true nature of the interview and its integrity. The tape will usually include the employee, who is under oath, reading his or her sworn written statement and explaining to a company representative what happened and how he or she was treated.

Such a recording can help to avoid many legal issues later on. For example, if the employee later claims duress or coercion or alters the description given in the recorded interview, his or her own words then contradict the "statement of fact [made] under penalty of perjury." Therefore, the tape recording is an effective safety net when used correctly. Investigators who are experienced in conducting such interviews with respect and dignity will generate recordings containing ample evidence of their fair treatment of the interviewee.

A successful interview will also indicate how much of that iceberg of problems lies underwater, so be prepared for the likelihood of an expanding investigation.

Investigative follow-up. You will have to follow up on new information that develops throughout the investigation. Arbitrarily selecting who or what to investigate will cause you to run afoul of the laws prohibiting disparate treatment. Your disciplinary response to confirmed employee malfeasance should also be consistent and nondiscriminatory. In addition, you should be aware of your state's laws and regulations on subsequent termination review procedures. For example, in some states a finding in an unemployment benefits hearing may not be used in a subsequent wrongful-discharge action brought by an employee. In other states it can be used, making your case at the unemployment hearing much more critical.

The process of investigating employee malfeasance may seem complicated and intimidating. But if conducted with skill, knowledge and a competent team of professionals, the investigation can be completed with minimal stress and negative repercussions. Conducting investigations properly will send a clear message to your employees that the company is committed to supporting high ethical standards and maintaining a safe, secure workplace.

RELATED ARTICLE: Police Involvement in Workplace Investigations

Often, a workplace investigation of employee malfeasance by a retained private investigator expands to invlove the police. If this happens, the investigator should avoid being directed by the law enforcement agency because it could later be construed that he or she was acting as a police agent. A subsequent investigative interview by the private investigator could severely damage the ability to prosecute, because the employee was not read the Miranda rights prior to the interview. As long as the police are only taking information from the investigator or company, the results of the interview will most likely remain untainted.

A competent investigator will give documentation to the police of a direct, exclusive working relationship with the company or corporate attorney. This documentation is an excellent way to preserve the freedom afforded private investigators in conducting interviews without the burden of Miranda. Although not required to administer the Miranda warning, the private investigator must make it absolutely clear that he or she is not a police officer, is not acting as one, nor working on behalf of any law enforcement agency.

In this way, the integrity of both investigations can be maintained.

James D. Vigneau, senior manager of Human Resources and Administration for Alpine Electronics of America Inc. in Torrance, Calif., is responsible for company HRAD operations in the United States and Canada. He is a member of SHRM and Professionals in Human Resources Association (PIHRA).

COPYRIGHT 1995 Society for Human Resource Management
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