An ounce of prevention - the value of workplace investigations

"Losing $100,000 a month is not good management."  This might be so, but as with all aspects of my job, context is required to assess this comment. Here, I take issue with the word "losing."

The quote is from an article published in the Edmonton Sun, and is ascribed to Tim Reid, CEO of a company called Northlands.  It was apparently exposed that some employee(s) had been stealing money within one of Northlands' divisions.  Rather than conduct a workplace investigation, the company decided to fire all staff who might have been implicated.

The link above describes the resultant $9.7 million dollar class action lawsuit.  From a number of perspectives, I cannot agree with Reid's quote, transcribed above.

According to the article, such an investigation would have taken four months, at a cost of $100,000 per month.  I thought it might be useful to contrast the chosen path with the path that was avoided.

• The chosen path involves 19 individuals pursuing their cases, the path avoided could have been down to one employee, who would likely have slim to no chance of winning having been fired for stealing.  It seems unlikely that all 19 employees were involved in this theft.  Accordingly, some number of them could likely have been cleared through a proper investigation, and their reputations preserved.

• The chosen path involves a prolonged court battle.  If successful, the company most likely recovers nothing.  The path avoided may not have involved a court battle at all.

• The chosen path guarantees that all erstwhile employees sue for money.  The path avoided might have seen at least some of these making valuable contributions to the economy for the same or more money, and contributing to the company's bottom line.

• Given the lawsuit, I am hard pressed to see how the investigation (or something similar) would not still have to proceed, except that it will now be very much compromised by the company's actions.

Bear in mind, nothing stated in the article is proven and one should always take a summary of a lawsuit with a grain of salt.  There are innumerable reasons a party might act in a certain way, only some of these reasons might be in the public eye.

But in a vacuum, I ask the reader to say "did I agree with the quotation that started this article?"  I hope by this point you at least see another perspective.

As with everything we lawyers do, a workplace investigation is supposed to pay for itself via the liability which is offset by engaging our services.  Blair Curtis and David McWhinnie of our office are experienced investigators and as their colleague I would argue have always delivered value by conducting such investigations.  Moreover, a short consultation with them might yield the response that an investigation is not warranted in certain cases, while affording peace of mind to the client making the inquiry.

So while losing $100,000 per month is likely not good management, spending $100,000 per month might be.  As a final comment, I doubt our bill would have been anywhere near $400,000 given my limited understanding of the circumstances of this case.