The Benefits of Investigating Employee Complaints

Monday, August 29, 2011

Thomas Fox


Article by Lindsey Walker of

Managers can’t sit with their hands over their ears chanting “lalala I can’t hear you”. Ignorance is far from bliss when it comes to workplace misconduct.

Ongoing misconduct such as fraud, theft, discrimination and other activities can lead to an unsafe workplace, as well as significant costs to an organization.

Failure to address employee complaints about any of these activities can only cause more trouble for you and your organization.

Ignoring Complaints

I came across the article, “Careful Investigation of Internal Complaints May Reduce Fraud Exposure,” written by William H. Maruca, Esq. and Carl J. Rychcik, Esq. Partners at Fox Rothschild LLP for Becker’s Hospital Review. The article discusses the number of incidents that were reported internally before an employee filed a lawsuit:

“A recent study by the National Whistleblowers Center found that 89.7% of employees who eventually file a lawsuit, such as a False Claims Act case, initially reported their concerns internally, either to supervisors or compliance departments.

In other words, a lawsuit was only filed after the employee failed to get satisfaction from the employer’s handling of the issue.”

The numbers above send a loud message to employers – investigate employee complaints! The article goes on to explain:

“Many of these cases could potentially have been mitigated and/or prevented by (1) having a sufficient internal compliance program in place, and/or (2) carefully investigating any complaints and reacting appropriately.

Taking some simple steps before a lawsuit is filed can ultimately mean the difference in preventing litigation and/or saving significant money.”

Investigations are Key

Here are 5 reasons why you should always investigate internal complaints:

1. Investigations help organizations prove that they take their code of conduct and other workplace policies seriously by enforcing rules and consequences.

2. Investigating employee complaints allows you to find out whether or not a violation of the company’s policy has in fact occurred. Should a lawsuit arise or the government gets involved, you’ll be better prepared to handle inquiries if you investigated promptly and secured necessary evidence.

3. Investigations can be expensive, as we’ve learned with cases like Avon, but lawsuits aren’t cheap either. Investigating employee complaints helps reduce risks and keeps your reputation intact. Companies have been rewarded for being cooperative and taking initiative by conducting internal investigations. Companies that fail to investigate are often slammed in the media and criticized by the public for their lax approach to misconduct.

4. Encouraging internal reporting helps you detect misconduct in its earlier stages. The sooner you investigate, the sooner you put an end to the misconduct reported. For fraud cases, this is particularly important, as stopping fraud sooner results in less money lost to fraud.

5. Investigating employee complaints allows you to identify patterns of misconduct and take the necessary steps to prevent it in the future. If you find that a significant number of investigations deal with sexual harassment, then you might want to take that as a sign that more time needs to be spent on that subject during employee training. Use the information from investigations to guide employee training and revamp policies, emphasizing on the problem areas identified by employee complaints.

Lindsey Walker can be reached at

Cross-posted from Tom Fox Law

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Kurt Aubuchon Lindsey:

Thanks for posting this. I agree that organizations need to carry out prompt and effective investigations. If I can propose one addition to your list of reasons: minor policy violations can be ancillary to more major violations. For instance in one situation I was involved with some years ago, an organization investigated someone for apparently accessing a small number of adult websites. However, it turned out that the adult material was really just from ads the employee encountered while on a spammer/carder forum. So, the adult sites that showed up in the web filter logs didn't turn out to be the major problem. But by chasing it down, they identified the bigger problem of someone possibly conducting illegal activity from the corporate LAN.

However, if you're going to have your infosec team participate in internal investigations, you have to have well-defined investigative processes and capabilities. I discuss managing the infosec investigative function here:

Thanks again!
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