Inside or Outside Investigations of Employee Conduct or Complaints?

It almost goes without saying that it is imperative in these times that businesses conduct impartial, timely and thorough investigations of workplace misconduct, including employee complaints.  Doing so gives businesses better chances to resolve issues, salvage employees, avoid litigation or at least better defend against liability.

There are many considerations in making the decision about how to handle employee complaints in a workplace investigation.  Among the considerations are:

  • What type of complaint is it? How severe is the underlying conduct?
  • What is the level of complexity?
  • Who and how many people or witnesses might be involved? Is there documentary evidence, such as notes, diaries, photos available?
  • What is the level of the alleged wrongdoer? Is he/she an executive level or more rank and file?
  • What is the structure of the HR function or department in your company? What is the experience level of the possible inside investigators?  Is there any perception of bias, favoritism, skewed perspective about any or all of the HR personnel in the company?
  • What is the need for confidentiality?
Reasons to Use an Outside Investigator

Having done investigations and employment law for almost 40 years, I will admit to having my own reasons and biases in favor of using trained outside investigators.  Setting aside those biases however, other than the fact that an outside investigator undoubtedly costs more at least to do the investigation and write up a report, there may be an actual cost savings in the long run.  Outside investigators are neutral, impartial, experienced in investigations and generally in employment law, and are supposed to be objective.  They do not have a continuing role within the business, play no part in subsequent discipline or in decisions the business may have in the future that involve, or are about the affected employees, complainants, witnesses and wrongdoers.  If there is subsequent litigation, or a threat of litigation, an outside investigator would have greater court readiness.  The chances of getting a more thorough and professional report is greater with an outside investigator.

Reasons to Use an Inside Investigator

There are no laws, state, federal or local, that dictate or require the use of either an in-house or an outside investigator.  Inside investigators, typically from HR or another department of the business, may be a familiar face to those individuals who will be interviewed, which allows them to feel more comfortable rather than having a stranger questioning the various witnesses, complainant, and alleged wrongdoer(s).  The inside investigator most likely has institutional knowledge regarding the people, the culture, and the company.  There is undoubtedly an initial cost savings to the company to have it be done by personnel who are employed by the business, although that savings may disappear or dissipate if the investigation, or the results, are later challenged.  The business also needs to look at whether it has the resources within the company to handle the investigation with the speed, experience and training and objectivity needed, all the while keeping the company running in the meantime.

There is a secondary issue that is often debated that needs to be decided by the business, both in choosing its investigators, and in determining their role.  The issue is whether the investigator should make recommendations, determinations in addition to a fact finding, or if they are strictly a fact finder.  A corollary issue is whether the investigator should make and report on the credibility of witnesses, if necessary, or leave that to the business to decide.  There are pros and cons and reasons for either, or both options, to be considered, but the issues should be decided before the investigation is commenced.  Usually, as long as the investigation is adequate and the report is comprehensive, the company will be deemed to have enough information that decisions about discipline, training, termination, etc., regardless of who makes them, should not be challenged.  The company knows its culture, the business risks and is arguably more knowledgeable, if not qualified, to reach such conclusions.  There are obvious exceptions to this, particularly if the investigation revolves around actions or conduct involving a high-level executive in the company.  In those circumstances, using an outside investigator and having that person recommend actions the company should take, removes concerns about objectivity or whitewashing.  However, turning over the determinations, conclusions, or outcome decisions, can be a difficult thing for a company to do.  Individual circumstances dictate that decision.