In a case that highlights the potential financial consequences when organizations fail to promptly, thoroughly, and properly investigate and address workplace misconduct, a pathology laboratory has agreed to pay a $63.5 million settlement.
The Case at a Glance
The settlement stems from allegations of engaging in improper financial relationships with referring physicians, a practice that violates federal law. While the specifics of the investigation process are not detailed in the available information, the outcome clearly demonstrates the severe repercussions and liability of inadequate internal controls and investigative policies and procedures.
Key Takeaways for California Employers
- Financial Impact: The $ 63.5 million settlement underscores the financial risk associated with failing to address workplace misconduct, which includes conducting prompt, thorough, and impartial workplace investigations.
- Legal Compliance: This case emphasizes the importance of understanding and adhering to federal regulations in the organization’s policies and procedures.
- Proactive Measures: implementing robust reporting and investigative protocols can help identify and address potential issues before they escalate to legal action.
Who can legally perform HR Investigations in California?
Under California law, the person who conducts the workplace investigation must be either a:
- California-licensed private investigator;
- Attorney “performing his or her duties as an attorney at law” (Cal. B&P Code §7522 (e)); or
- An Employee conducting internal investigations for the organization.
While other HR firms may be willing to perform an external workplace investigation, the law prohibits them from doing so without the requisite license. Under California Law, any person who is not one of the three mentioned above, and conducts an administrative investigation in California, is subject to fines up to $10,000 imposed, imprisonment for up to a year, or both.
If there is grievance, civil service appeal, or civil lawsuit related to an HR investigation conducted by someone who is not legally authorized to do so, the investigation can be invalidated and both the investigator and the California employer are at risk of potential criminal and civil liability.
The Role of Workplace Investigations in California
Prompt, thorough workplace investigations serve as a crucial line of defense against potential legal and financial risks. They help:
- Uncover misconduct early
- Ensure legal compliance with laws and regulations
- Protect company reputation
- Mitigate financial loss
Why choose California Labor Solutions?
California Labor Solutions (CLS) is one of the only HR firms licensed* to conduct workplace investigations in California. We serve private businesses and public-sector organizations throughout the state. We have conducted hundreds of neutral, impartial, objective, and unbiased workplace investigations related to identifying issues and risks within the organization as well as for employee complaints relating to allegations of discrimination, harassment, retaliation, workplace violence, and various types of employee misconduct with the utmost quality, detail, and efficiency.
*California Private Investigator License Number 26311.
Disclaimer
Please note that the updates, advisories, and regulations we receive from the promulgating agency often contain ambiguities and/or are often amended, modified, or updated. This material/article/email does not contain any legal advice. The information and opinions expressed herein are based on our reasonable interpretation of the issuing agency’s publication at the time the opinion is expressed and is, therefore, subject to change based on further developments. The effect of the opinions expressed may be different based on your particular circumstances, and it is recommended that you not rely upon these general opinions prior to obtaining a consultation with your legal and/or financial advisors.