Misconduct Investigations

Employee Misconduct

Employee misconduct ranges from simple issues such as spending too much time on the phone or Internet to acts of violence. Some situations can be handled with a reprimand or warning. Serious offenses may require an investigation to substantiate allegations or suspicions. In rare instances, you may need to report the situation to the police or another outside agency.

Situations warranting an investigation may include:

• Misconduct relating to conditions of employment, including misuse of equipment, computers, and vehicles and/or refusal to comply with job-specific directions or instructions.
• Misuse of company financial products, including credit cards, checking accounts and securities; misappropriation of company finances (embezzlement).
• Violation of federal, state, or local laws or regulations.
• Violation of the business’s pre-existing written policies, such as those covered in employee handbooks or employment contracts.
• Noncompliance with the requirements of a licensing or regulatory organization that oversees your industry, such as an occupational licensing board, Department of Insurance, State Bar Association, or Board of Medicine.
• Use of alcohol or drugs, including prescription drugs, or any situation that impairs the employee’s ability to safely perform his/her work, operate machinery or vehicles, or that affects the safety of employees, customers, or the public.
• Aggressive or belligerent behavior toward the employer, other employees, customers, or the public.
• Dishonesty, including lying, to the employer, other employees, customers or suppliers.
• Theft or destruction of property and other acts of vandalism.
• Conduct that creates a hostile work environment, including harassment and overt discrimination based on race, religion, age, or other protected factor. Bullying is a form of harassment.

Allegations of misconduct should be addressed quickly and objectively. Depending on the nature of the offense, an outside investigator may need to be engaged to assure the business and owner/owners have some legal protection from a potential lawsuit. Your attorney may need to be notified before the investigation begins. According to the Fair Credit Reporting Act, which covers employment and pre-employment investigations, you do not need to notify an employee or obtain permission to perform an investigation.

Documentation: Document, document, document! Be certain to keep an ongoing written record of every step of the investigation, including warnings, with dates and time of day for your protection should you be sued.

Completed investigations: If you take action after an investigation is completed, the employee must be given an “adverse action” notice after the action (such as a suspension or termination) has occurred. An employee who is the subject of a misconduct investigation is legally entitled to receive only a summary of the investigation report, but not the full report, which may include confidential information, including the names of people interviewed during the investigation.

Depending on the situation, the completed investigation report may need to be shared with:

• Your attorney
• Your company board of directors, other owners or partners
• The police
• Representatives of any federal, state, or local agency charged with oversight of the business activity in question, such as the Department of Finance or Department of Insurance.
• A self-regulatory organization with regulatory authority over the activities of the employer or employee, such as an occupational licensing board, State Bar, or State Board of Medicine.
• Any other organization as required by federal, state, or local law, including a labor union representative if the employee is a union member.

The report should not be shared with other employees or with anyone who does not have a legal need to know. It is important to protect the privacy of the employee under investigation.

Disputing findings: According to the Fair Credit Reporting Act, an employee cannot dispute the findings of an investigative report with the employer, but he/she may be able to file a lawsuit or a union grievance if wrongful termination can be proved. (The Fair Credit Reporting Act is administered by the Federal Trade Commission.)

For more information on this topic, see Ten Steps to a Successful Workplace Investigation.