Best Practices for Fund Managers to Investigate and Document Employee Discipline (Part Two of Three)

Before an adviser can discipline an employee for misconduct, it must first determine whether, and to what extent, discipline is warranted. During any investigation, special attention must be paid to gathering evidence to support an eventual disciplinary action for wrongdoing uncovered during the investigation, and the disciplinary process must be rooted in legitimate fact finding. In fairness to the target, there must be an actual investigation, and any discipline imposed must be based on facts rather than hearsay. This second article in our three-part series on employee discipline addresses techniques advisers can use to gather evidence to effectively support a disciplinary action, including the thorny issue of protecting privilege while building a record. The first article discussed the value of setting expectations for discipline in advance and ways advisers can impose discipline consistently in the face of inconsistent local employment laws. The third article will identify steps an adviser can take to promote institutional due process when disciplining an employee. See “How Fund Managers Can Maintain Work Product Protection During Investigations After the Herrera Decision” (Feb. 22, 2018).

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