Employers' Ability to Investigate Misconduct Threatened

WASHINGTON, D.C. – The United States Chamber of Commerce urged Congress to protect an employer's ability to use outside consultants to investigate alleged worker misconduct, in testimony today before the House Subcommittee on Financial Institutions.

"Limiting an employer's ability to pursue allegations of misconduct was never the intent of Congress," said Stephen Bokat, Chamber Senior Vice President and General Counsel. "Requiring employers to inform and seek permission from workers suspected of misconduct, before hiring an independent consultant to investigate that misconduct, will have a chilling effect on employers' ability to pursue allegations of wrongdoing."

Last year, the Federal Trade Commission issued an opinion letter suggesting that third party investigations of worker misconduct were subject to the Fair Credit Reporting Act (FCRA). Making these types of investigations subject to the FCRA would require employers to tell workers accused of misconduct that they were under suspicion and get their permission before starting an independent investigation.

"Few, if any, workers would consent to a third-party investigation," said Bokat. "FCRA's broad requirements for notice and disclosure during investigations also will make witnesses less likely to come forward for fear of retaliation and workplace violence."

This will be particularly devastating for small and mid-sized companies that do not have the resources to investigate misconduct in-house, but must rely on outside experts, according to the Chamber. Further, FCRA requirements could undermine an employer's effort to comply with other federal obligations, which require employers to investigate thoroughly – and promptly correct – alleged wrongdoing, such as sexual harassment, safety violations and employee theft.

"Amending the FCRA to exempt third party investigations, while protecting workers privacy rights, is critical if employers are to meet their obligation to provide a safe workplace," Bokat said.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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