The When, Who, How And What Of Internal Investigations

Organizations of all types can face situations when an internal investigation is helpful, or needed...
United States Employment and HR

Organizations of all types can face situations when an internal investigation is helpful, or needed, to establish facts and identify potential risks. These may include allegations of sexual harassment, a violation of company policy, or even criminal conduct. When confronted with such a situation, the organization's leadership must carefully consider whether a formal investigation is warranted and, if so, how it should be conducted and with what end goal. Here are four questions to review.

When is an internal investigation required?

Not every workplace complaint warrants a formal investigation. For example, complaints relating to personality conflicts or other common workplace disagreements are usually best handled by a supervisor with some guidance from the human resources ("HR") department. However, allegations of misconduct that go beyond the ordinary and potentially implicate legal or policy issues that can create risk for the organization, such as a report of sexual misconduct, discrimination, regulatory deficiency or criminal conduct should always be investigated. These types of situations can create potential risk for the organization in the form of civil litigation, regulatory enforcement proceedings, or even criminal prosecution. The determination of whether an allegation requires an investigation should be made by someone entirely unbiased and competent to evaluate the situation.

Who should conduct the investigation?

Once it is decided that an investigation is appropriate, the next question is whether it can and should be conducted in-house or by an independent outsider. The right answer depends on a range of factors, including whether the organization has an adequate in-house investigative capability. Large companies generally have a human resources department capable of investigating most types of workplace complaints with the advice of in-house legal counsel. Small organizations may not have such in-house resources. Even when adequate in-house capability does exist, there are other factors that may favor the retention of an outside investigator, such as a conflict of interest, a subject matter requiring specialized knowledge, or when the allegation implicates one or more senior leaders within the organization. In any of these situations, engaging an independent outside firm with the expertise to conduct the investigation is generally the way to go.

How should the investigation be conducted?

After determining that an investigation is warranted, someone, whether the head of HR, an in-house attorney or the board of directors, depending on the nature and target of the allegation, should work together with the investigator to determine the scope of the investigation. This discussion should include, among other things, a timeline for completion, whether witness interviews can be virtual or must be in person, and details of document retention, if appropriate. If using an outside investigator, a budget should also be discussed. A detailed discussion upfront about the scope of the investigation will generally avoid unmet expectations at the end of the process.

What is the deliverable?

There must be agreement on exactly what will be delivered to the organization at the end of the investigation. Sometimes, the goal of the investigation can be accomplished with a verbal briefing by the investigator without a formal written report of the investigator's findings. Other investigations demand a formal, written report. This decision will depend on several factors, including the subject matter, the nature of the allegations, potential regulatory implications and whether a parallel law enforcement investigation is also underway.

An internal investigation can be an important tool for an organization to understand the facts surrounding an allegation or report of misconduct or wrongdoing and any potential risk the organization may face as a result. Conducting an internal investigation properly is critical to mitigating that risk to the greatest extent possible.

Originally published by Nevada Business Magazine.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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