Beyond harassment and discrimination investigations: Investigating employee honesty, loyalty, and integrity

For many years prior to joining Rubin Thomlinson LLP, my work involved the investigation of matters that did not relate to harassment or discrimination. I held in-house roles in the private and public sectors that involved the oversight of whistleblower programs. As there are usually established channels for reporting harassment and discrimination, the issues that I dealt with through these programs generally related to other types of misconduct.

I want to discuss, in this blog and in others that will follow, investigations that don’t relate to harassment or discrimination. There are a few reasons I want to do this. First, there are some important differences between conducting investigations that involve harassment and discrimination, and those that don’t. I think it’s a mistake to use a “one size fits all” approach (more on this in a future blog). Second, I think that in workplace investigation circles, our focus is often on harassment and discrimination, so I want to make sure that we provide resources to those in-house who deal with other types of wrongdoing.

In this blog, I provide examples of employee misconduct (other than harassment and discrimination) that is reported internally, and the benefits of investigating these matters.

I have observed over the years that there is a wide-range of employee misconduct that is reported within organizations – anything from minor policy breaches to criminal activity. What is reported may also depend on the standard of behaviour that an organization has set for its employees (for example, the expectations that are set out in an organization’s code of conduct/ethics). That said, I have found that conflict of interest situations (i.e., situations where an employee’s personal interests collide with their obligations to their employer) are a frequent area of complaint.

The following are examples of misconduct that may be reported:

• • Using or disclosing the organization’s confidential information to gain a personal benefit (e.g., disclosing information to a proponent during a procurement process to give them an advantage)
  • Hiring friends or family members
  • Falsifying business records (e.g., to cover up wrongdoing)
  • Procuring goods and services from a business in which an employee has a personal interest (e.g., a business that they, or their family, own)
  • Collecting, using, or disclosing the personal information of individuals in an unauthorized manner (e.g., providing personal contact details of employees to an external organization without consent)
  • Engaging in theft
  • Misusing the organization’s assets for a personal benefit (e.g., using an organization’s vehicles on personal time when such use is not permitted)
  • Misusing the organization’s time (e.g., running a separate business on the organization’s time or not working during business hours)
  • Engaging in a romantic relationship with a subordinate
  • Receiving gifts or “kickbacks” (e.g., accepting a personal payment in exchange for awarding a contract for goods or services to a specific person or entity)
  • Committing fraud

What is at stake in most of these examples is an employee’s trustworthiness, honesty, loyalty to their employer, judgement, and integrity, rather than how they treat or interact with others, which is usually what is at stake in harassment and discrimination matters.

The purpose of investigating this type of employee misconduct is to minimize the following risks:

• • Legal risks: Wrongful behaviour by an employee could result in legal consequences for the organization. For example, there may be legal implications for an organization if one of its employees falsifies documents that are submitted to a regulator.
  • Financial risks: Employee wrongdoing can also come at a financial cost to the organization. Fraud and theft are obvious examples, but there are others. For example, an employee who awards a contract to a company with which they are not at arm’s length could result in the organization paying more for goods or services than it would have if there been a competitive procurement process.
  • Reputational concerns: There are, of course, reputational risks to consider. Illegal or unethical practices by its employees may tarnish an organization’s brand and reputation, erode trust, and ultimately discourage actual or potential stakeholders (e.g., customers, investors, employees) from engaging with the organization.
  • Morale and retention issues: When employees see others bending the rules, or receiving an unfair advantage, it may create a morale issue in the organization. It could, in turn, result in the loss of high-performing employees. For example, a manager promoting someone with whom they are in a romantic relationship will undoubtedly feel very unfair to those competing for that same promotion.

Other than minimizing risks, investigating employee misconduct can often uncover weaknesses in an organization’s internal controls. Take, for example, the case of an employee who “borrows” one of the organization’s vehicles on the weekend. An investigation may reveal that the organization did not track its vehicles nightly to ensure they have been returned, an issue which they can then address. Like internal audits, then, investigations can help to strengthen the organization’s internal controls and processes.

In my next blog, I will provide some insights into the difference between investigating matters involving harassment or discrimination, and those that do not.

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