Investigating Employee Misconduct
Employee misconduct in the workplace can have a toxic effect on morale and productivity, which often incentivizes employers to resolve the situation quickly. These days, there are clear benefits to getting out in front of any misconduct complaint as movements like #MeToo have employers scrambling to vet their workforce so they can identify predators before scandal or evidence of misconduct can become public. In a surveillance culture where both bad behavior and good behavior are fodder for a good viral news story, employers everywhere are starting to understand the value in properly handling a corporate crisis. But in their haste to resolve the situation, are employers handling internal investigations properly?
Regardless of the type of business and type of misconduct, (sexual harassment, drug-trafficking, theft, etc.) the first instinct where there is a whiff of employee misconduct is often to keep the information very close to executives. As with any investigation, the controlled release of information has an investigative advantage in identifying the true culprits of any misconduct. This is the beginning of employers remaining too close to the situation. It’s not unusual for a well-meaning employer to appoint themselves as the head of the investigation—but this presents a huge conflict of interest. As a person with a great deal to lose, the employer is, by their very nature, biased and an unbiased investigation is the foundation for anything built on an employee complaint. Without the use of an external investigator, the case loses integrity.
Hiring an external investigator, like a licensed private investigator, will bring a flattering layer of transparency to any workplace investigation. First and foremost, a private investigator is an independent third-party. Having no personal knowledge of the employees involved—and therefore having no preconceived notions about them—means they can truly approach the case from an indisputable place of objectivity. The employer’s personal knowledge of their employees disqualifies them from such objectivity. Whatever the misconduct du jour, they might never suspect their trusted personal assistant, their senior manager, or their business partner—all individuals with extensive access to company information and property. However, a private investigator will vet this list of possible suspects in search of the truth.
When an employer is unsure of how to proceed when investigating workplace misconduct, it seems like a no-nonsense solution to let the lawyers handle it. And it can often make sense, as they will be fielding any litigation that surfaces. In-house counsel might feel it’s under their purview for the same reasons, but this is very misguided. The lines of their capacities as both in-house counsel and investigator cross one another, thus creating another conflict of interest. While there are states like New York that allow attorneys to act as private investigators without a license to do so, this is still not recommended. Witnesses within the company will likely have anxiety about speaking to the company’s lawyer, and might not be as forthcoming with pertinent details. Leads suddenly begin pancaking into dead ends as nervous employees become less cooperative. Private investigators have the advantage in this situation, as they are not representatives of the individual’s employers in any capacity, and have no power to fire them. It’s the same advantage private investigators have over law enforcement because they have no powers of arrest.
The documentation provided by a private investigator is invaluable to workplace investigations. After all, many reports not handled to the satisfaction of the complainant often lead to legal action, the most common example being the more familiar story of sexual harassment in the workplace: An employee alleges sexual misconduct against another employee. Both parties are interviewed. The interviewer does not tape the interview nor take notes. After a shoddy investigation, the complainant decides to sue the company for negligence. Another common example is the case of an employee who is hastily terminated for FMLA abuse or malingering before the company conducts a thorough investigation.
Not only are paper and ink expensive, but filling out and preparing reports is time-consuming—time that would be better spent trying to improve your business. Private investigators keep meticulous records, just like law enforcement, of all witness statements, evidence, surveillance, and relevant information to the case. This will go a long way towards addressing the complaint after the PI has issued their solution. It’s a perfect package: The investigation is chronicled from beginning to end, all of the relevant information is accessible, and best of all, it was conducted, prepared, and presented by a completely objective, independent third-party. The same third-party can also offer testimony in any court case that might result from the investigation.
Whether you’re investigating sexual harassment allegations, drug-trafficking, theft, or any complaint of employee misconduct, make the proactive choice of hiring a private investigator. It’s the strongest first step you can take in any internal workplace investigation. From the beginning, the investigator will be an impartial, unbiased eye whose only loyalty is to the truth. This kind of due-diligence will go a long way towards demonstrating you, as an employer, have heard the complaint, taken it seriously, and are only interested in what actually occurred. The solution will not be based on pre-conceived notions of colleagues, or biased assumptions, but independent deduction and well-documented evidence. And even if the investigation comes to a less than amiable termination, the foundation laid by the private investigator will protect your business from litigation.
Using a CNC to Protect Your Business
If you own your own business, you know finding the right people to build your company is vital. One “weak link in the chain,” as they say, can tear a business down to its foundation. And as such, it’s not only important to hire the right people, but also protect your business from being exploited in the event a former employee might expose trade secrets. If it is your business’ practice to require a signature of an employee on a covenant not to compete, you should consider having a private investigator on retainer in order to vet any suspicions of non-compete violations.
Often referred to as a non-compete clause, a covenant not to compete or CNC is designed to protect an employer’s business against future competition or theft of trade secrets by a former employee. In essence, the CNC prevents a former employee, terminated or otherwise, from using a business’ trade secrets to either work for or start a rival business. Violators of CNC have an intimate knowledge of a particular business and can use that information to destroy it. In addition to exploiting the successes of a company by using the same strategies, a violator uses their knowledge to exploit the weaknesses of a company. They know where the vulnerable spots are in their business model, and violators can correct this process in the rival business, as well as, target their former employer in advertisements.
These legal contracts have a history going back as far as the 15th century, when English common law refused to enforce the Renaissance-era CNCs on the grounds they would place too many restrictions on trade. There have been many arguments made CNCs also interfere with America’s capitalist economy, placing restraints on the free-market standards in the United States. There are only a few states in the union completely prohibiting the use of non-competes, including California, Montana, North Dakota, and Oklahoma. One of the industries where CNCs are most common is the media. Most media-conglomerates force employees to sign CNCs at the time of hire to prevent them from sharing delicate information about media markets upon leaving their position. Another common industry is finance, especially Wall Street, where a person can literally be indicted for knowing too much, having been charged with insider-trading. Many might remember reading about CNCs back in 2005, when Microsoft and Google took a former employee, Kai-Fu Lee, to task by enforcing his CNC after leaving the company. CNCs are everywhere, and as such, businesses would be wise to employ external investigators to get the hard facts on CNC violations.
As was the case with FMLA fraud violations within a company, having an external investigator—like a PI—on retainer, will allow the company to protect itself in the event they believe a former employee has violated their CNC. The fallout from CNC violations can be ugly, with former employees insisting, not only did they not violate their CNC, but also they are being persecuted by their former employer. A private investigator is a third-party, which means they are well within their means to be objective. A private investigator’s loyalty is to the truth, as such, you can rely on cold-hard facts to bolster a case against a CNC violator. This objectivity comes in handy during litigation when enforcing a CNC.
The former employee cannot claim their employer is biased in their fact-finding, because they did not conduct the investigation. While a business can sue a former employee for violation of a CNC, it is not a criminal matter, so a business cannot ask law enforcement to investigate. Luckily, private investigators often have a resume bearing similar experience to law enforcement, as well as ,a very similar set of tools to find answers. They can locate witnesses, witness statements, videotapes, photographs, and acquire documents to build a prima facia case against a CNC violator. Whatever the circumstances, having an objective external investigator on retainer will provide businesses with the assurance they have conducted all necessary steps to safeguard their company.
3 Big Ways Private Investigators Can Help You When Working in Emerging Market Areas
When investing in a new market, there is always an inherent risk. However, when you are doing business in an emerging market, this risk is amplified greatly, as is the feeling of uncertainty you may have before taking the plunge. There are a lot of reasons why emerging markets are attractive right now: with the globalized world, increasing your reach to be more international is a strategic and sometimes necessary move. Emerging markets can often offer you with economic opportunities that are unheard of domestically, and offer you somewhat uncharted territory to expand and grow. However, in doing this, there are a lot of things to take into consideration. You need to know what exists already in the market, what your contribution is going to signify, and, perhaps most importantly, who you are working with.
Emerging markets, including Brazil, Chile, China, Colombia, Hungary, Indonesia, India, Malaysia, Mexico, Peru, Philippines, Poland, Russia, South Africa, Thailand and Turkey, offer great opportunities. However, when it comes to entering into business with someone who already lives or works in the emerging market in question, or investing in these foreign stock markets, there are obvious questions that arise. First of all, this person is possibly not from the same culture, and does not conduct business the same way. Second, this person is assumed to be physically far from you, so the ability to work with them face-to-face may be impossible. Third, because of the different laws, processes, and infrastructure in the foreign country, it may be harder for you to “check out” the person properly before you begin working.
This is why so many people turn to private investigators to help them research their potential partners before entering into an emerging market. This blog post outlines 3 specific things that a private investigator can help you discover and understand before going into business with someone- things you probably cannot figure out for yourself.
- Is Your Plan Really Possible?
Sometimes we have an idea, and it seems possible, and even plausible, because we are working on incorrect context. Unfortunately, this is often the case with people who want to invest in emerging markets. We often think that we have an understanding of how life and business works in a foreign place, but in reality, we are acting on stereotypes or misconceptions. Something that a private investigator can help you do is to give you appropriate context to decide if an investment is actually a good idea. A PI that specializes in the region you are hoping to invest can give you an idea of how things work in the area, and how the reality might be different from your ideas or preconceptions. Common misconceptions could be:
-What government of the country you are hoping to invest in is like, and how it might interfere with your plans.
-Whether or not outside investors will be allowed to participate in the investment at all.
-How the foreign currency operates and how it will hold up in the future. - Is the Deal What You Really Think It Is?
Another issue when it comes to doing business in an emerging market is communication. In order to make a smart and productive decision, you need to have access to all of the necessary information to make sure you know exactly what you are getting into. This can be difficult in countries that have less resources available. An emerging market country may have loose accounting standards and less publicized information in general, which will make getting the information you need more difficult. In addition to that, the information may be in a different language, and will be according to the laws and codes of that specific country. All of these differences can add up and make it very difficult to get the information you need quickly and efficiently in a standard investment.
Communication issues are prevalent even in situations where everything is correct, but in the case that you are faced with a fraudulent or corrupt investment, it is even more difficult to discover the fraud because of all of these practical differences between countries. This is why many people hire a private investigator before making a decision in an emerging market, to protect their assets and make sure they know exactly who and what they are working with.
- Is the Market Really There For You?
Lastly, many people make mistakes in emerging market deals because they overestimate the opportunity that is available in the market. Most of the time, this means that people are choosing the wrong time to invest. Emerging markets follow very different trends than stocks in developed countries, and you need to be sure that what looks like a good investment actually is. Getting stuck with an investment that quickly falls apart, or one that you have a hard time liquidating in the future, can be just as deadly to your prospects as getting involved in business with a corrupt investor. This is why it is always best to hire a private investigator that specializes in emerging market analysis before you invest.
If you are looking for a PI to help you make your emerging market investment decisions, consider Lauth Investigations. You can learn more here!
Tips for Stopping Theft in the Workplace
Theft in the workplace is a major problem. According to the Global Retail Theft Barometer employee theft costs American businesses even more than theft by non-employees. Employee theft made up 43% of all lost inventory in 2015. That’s an annual cost of roughly $18 billion. It’s $2.3 billion more than the cost of theft by customers. Most of the theft that occurs isn’t an employee taking items and walking out of the store with them.
“Usually it happens during checkout, when an associate manipulates a transaction to benefit themselves or someone else,” Ernie Deyle, a 30-year veteran of the retail loss-prevention wars who leads the business consulting practice at London-based data analytics firm Sysrepublic told Fortune.com. Employees might, for instance, enter refunds, discounts, or voided transactions into a cash register or “cancel transactions, modify prices, or say someone used a coupon when they didn’t.”
The interesting question, of course, is not so much how as why. “Key reasons … include ineffective pre-employment screening, less employee supervision, and easy sale of stolen merchandise,” the report says.
Deyle sees cultural differences at work too. “Internationally, there’s more of an unwritten code that says it’s not honorable to do something dishonest toward an employer,” he says. “Here, it’s a different mindset. There’s so much turnover in retailing, and very little loyalty.”
So what can businesses do to combat employee theft and protect their investments? For starters they can invest in a stronger background check system. The reports says one of the key reasons theft happens is due to “ineffective pre-employment screening.” Everyone’s trying to cut costs and increase their dividends, but a lack of investment in screening employees thoroughly can end up costing your business more down the line.
One of the best ways to prevent losing inventory to employee theft is to get your employees involved in the prevention process. Very few people want to be the one to tell the boss about a coworker’s theft. It’s not that they think stealing is ok or don’t care, but who wants to potentially ruin relationships with people you have to work with every day?
Tip lines in 2016 mean more than just 1-800 telephone numbers. Setting up an email address dedicated to tips allows employees to anonymously report a coworker’s stealing. Everybody text messages nowadays and creating a text message tip line is perfect for younger employees. Tip lines are a great way to empower your employees to report cases of theft without exposing themselves to retaliation from coworkers or the people they report.
Another cause for employee theft is a lack of consistent oversight. Employees don’t want someone constantly standing over their shoulder, but thinking someone is watching them will decrease the rate of employee theft at any business. Cameras are a good option to create the presence of supervision and keep employees mindful of their actions.
Private investigators can help with every aspect of this and more. Recommending and installing cameras in places most likely to disrupt theft is too easy for a good P.I.. They can also operate the tip lines to make sure every tip is investigated and your employee’s anonymity is protected. Investigators are perfect for higher quality background checks too. Don’t wait until it’s too late. Protect your assets today.
For Private Investigation Inquiry contact Thomas Lauth, Lauth Investigations 317-951-1100