A case of workplace misconduct

In this case study — the first in a series covering compliance and investigation issues across the globe — the author, a veteran ethics and compliance professional, details a workplace misconduct investigation involving a senior business leader at a large organization in India. The inquiry, which began with harassment allegations, revealed other questionable activities the senior leader was engaged in.

As a veteran compliance executive with more than two decades of experience, I’ve had the opportunity to promote ethical business operations around the world. Throughout my career, I’ve helped numerous organizations mitigate compliance risks and develop sound business practices rooted in integrity. I’ve also conducted investigations related to workplace ethical lapses in 29 countries. An essential part of conducting any sort of investigation involving compliance and ethics issues is knowing — and understanding — the laws and regulations of the jurisdiction in which you’ll be working. While you may use similar methods and tools across engagements and employ high levels of skepticism and curiosity no matter the situation, the laws and regulations of a particular jurisdiction will vary and influence how you approach a case. In this article, I recount a case I worked on in my home country of India that involved questions of workplace misconduct involving a senior leader of a large U.S.-owned company with more than 25,000 employees. The inquiry into the senior leader started after a female employee complained about him making her uncomfortable during a meeting. But, as our investigation progressed, we uncovered other ethical issues concerning the leader, including a possible conflict of interest with a vendor. India’s Prevention of Sexual Harassment (POSH) Act, a law enacted in 2013 to protect women in the workplace, played an important role in our investigation. The law figures prominently in how Indian businesses conduct internal investigations involving professional conduct.

To start, I’ll take you through the facts of the case and the details of the investigation. Then, I’ll review the POSH Act and how it affects workplace investigations in India, and the provisions that companies must comply with. Please note that names and certain details have been changed to protect people’s privacy.

An uncomfortable meeting

M4 was a newly hired senior leader for an organization located in northern India. He worked largely from his home but frequently traveled to the organization’s three offices to meet regularly with his colleagues. A top executive brought M4 into the organization — an association that M4 routinely leveraged to develop business internationally for his new employer.

On one of his regular visits to a particular office, M4 was accompanied by three of his direct reports; we’ll refer to them as M1, M2 and M3. While on the site visit, M4 held several meetings with various employees. During one meeting with several colleagues, including his direct reports, M4 became transfixed by a young female employee, who we’ll call WE1. He stared at her throughout the meeting. Others noticed M4’s behavior but chose not to say anything to him about it. However, M4’s attention made WE1 highly uncomfortable, and she was embarrassed by M4’s unwelcome gaze. After the meeting ended, she approached her manager about the situation. As a longtime employee of the organization, the manager had his own personal reservations about M4 and struggled with the new senior leader’s work style. The manager decided to escalate WE1’s complaint to the organization’s internal investigations team.

But that wasn’t the only incident involving M4 that the manager decided to escalate. Along with WE1’s complaint against M4, the manager relayed to the investigations team that M4 had directed one of the manager’s subordinates to purchase silk garments valued at 11,000 rupees ($130) for him. M4 told the employee he’d pay him back for the purchase. Three months later, M4 still hadn’t paid the employee for the purchases even though M4 had worn the silk garments. The manager produced evidence of M4’s lack of payment, which included the bill for the garments and WhatsApp communications in which M4 asked the employee to buy them, and confirmed that he’d settle the amount later on.

In the other incident, the manager told the investigations team that M4 had tasked other senior managers with serving him tea from the cafeteria and taking away his soiled cups when he was finished — an inappropriate request for a senior leader to make of other managers.

At first, the investigations team didn’t prioritize the manager’s complaints against M4, despite his seniority within the organization.

At first, the investigations team didn’t prioritize the manager’s complaints against M4, despite his seniority within the organization. Nonpayment for the silk garments wasn’t overly concerning considering their low material value of $130. Then, WE1 had second thoughts about her harassment complaint against M4. Under the POSH Act, if the woman raising the allegations decides not to pursue a case, the company can’t continue investigating those specific allegations. But our discussion with WE1’s manager raised other questions about M4 that ran afoul of the company’s code of conduct. We decided to perform our due diligence and dig deeper into M4’s professional behavior.

Following through

To get a better understanding of M4’s professional conduct, we decided to interview other women in the company about their interactions with M4. We identified a random sample of female employees of varying positions and locations throughout the company, and through these interviews, we learned of another incident involving M4 and a female employee, WE2. She had sought the advice of her manager (M2) after a troubling interaction she had with M4. In this particular incident, WE2 had a scheduled video conference meeting with M4. She logged into the meeting and waited for him to join. M4 finally joined but was on mute and had his video camera turned off. WE2 waited for him to officially start the meeting, but after 15 minutes he still hadn’t turned on his camera or unmuted himself. Figuring he was occupied with something, WE2 logged off. But as soon as she left the meeting, M4 called her mobile phone, asking why she’d logged off. She explained that she waited but couldn’t see or hear him and assumed he was no longer online. They talked for a few minutes about work-related items and then ended the call.

WE2 wasn’t sure what to make of the incident and sought the advice of her manager, M2. She explained the situation to him, and although he listened to her concerns, he didn’t provide any guidance. M2 knew of M4’s strong connection with the company’s leadership, so he decided not to make any waves. WE2 subsequently brushed off the incident until the investigations team approached her. We suggested that WE2 file a sexual harassment complaint against M4, but she declined to pursue it.

We were then left with an important question about M4. Did these two interactions indicate a pattern of behavior? With this question in mind, we pressed on and decided to interview M4’s other direct reports.

The interviews continue

We then turned our attention to one of M4’s female direct reports. We approached this direct report discreetly so as not to influence her answers or foster any bias against M4. While all investigators must strive to avoid any sort of bias in interviews, it’s especially important to avoid this during an inquiry that involves sensitive interpersonal matters like harassment.

The investigation team confirmed WE2’s testimony with her manager, M2, but then he raised an additional issue regarding M4’s relationship with a vendor. M2 told us that M4 had outsourced work to a new vendor that he thought M4’s team could’ve accomplished without external assistance. M2 expressed frustration about M4’s outsourcing of work, but didn’t provide any specific information that suggested any wrongdoing. A quick search of the vendor database didn’t show that the vendor was registered with the company, and, with the company’s rigorous vetting and onboarding process, it would’ve been difficult for M4 to refer and onboard a new vendor in the short period of time he’d been with the company. We met with M2 again to clarify the information about the vendor. This second interview revealed that M4 had an ongoing engagement with the vendor not listed in the database. The plot thickened.

An expanded search

The discovery team provided evidence that suggested there were active communications between M4’s new hire, M1, and the vendor. M4 was often included in those communications. We ultimately decided to expand the inquiry to examine the relationship between M4 and the vendor while simultaneously conducting open-source research. We searched for a contact in the procurement department who could explain how M4 was able to engage an unregistered vendor. The intent was to gather as much information about the vendor as possible before the team interviewed M1. However, nobody could identify any information about the unlisted vendor, so we had to go to M1 directly. He confirmed an ongoing proof of concept (PoC) by the vendor, with eight of the vendor’s staff members working on the project. M1 told us that he wasn’t sure if the internal employees could’ve carried out the work themselves. M1 provided the name of a senior procurement manager who had knowledge of the engagement. He also gave us the contract and engagement letter signed by the vendor.

We found someone in the procurement department who could shed light on whether the vendor needed to be registered and listed in the database. That employee confirmed that the vendor didn’t need to be listed to conduct a PoC if the monetary value of the project was less than $50,000. In this case, the PoC was valued at $47,000. The senior procurement manager also told investigators that M4 introduced him to the prospective vendor in a face-to-face meeting at the office. At the time of the meeting, M4 had only been working with the company for two months. A review of the PoC with the senior procurement manager didn’t raise any red flags.

We were still investigating whether there were other incidents of harassment involving M4, and we met with M4’s executive assistant for an interview. Initially, she was defensive, providing only one-word responses to questions. Highly sensitive matters, such as questions of harassment, require acting with great care during interviews, and we had to adjust our line of questioning with the executive assistant to build rapport with her. We turned to open-ended questions to encourage more detailed responses from her. After this, she began to open up, and at one point in the interview, she burst into tears. We decided to stop the interview to give her time to recover. Giving an interviewee this time can build trust and can even turn a subject into an important ally.

Indeed, allowing the executive assistant some time to collect her thoughts led to pertinent information. She revealed that she’d often felt harassed by M4. She detailed how M4 would call her late at night regarding tasks that could’ve been discussed at work the next day. He’d sit close to her and insist that she enter his expenses while he was present. He even had her do his taxes — no other leader had ever asked that of her. She also complained that she had to arrange the car that would drop him off and pick him up from hotels while he was on site visits. She said that he’d often make the car service wait for him for hours, even though drivers are supposed to wait only 15 minutes for employees. He’d also send her on errands to purchase local delicacies that he’d bring home with him.

The executive assistant also revealed a rather interesting bit of information about her boss: M4 had tasked her with arranging his travel itinerary between the company’s San Francisco office and New York, where his daughter lived. The vendor to whom M4 had outsourced work was also based in New York. This information merited further research. If we were only focused on confirming the allegations of sexual harassment, this interview would’ve been enough to substantiate those allegations. But this investigation was proving to be multilayered and complex, raising numerous ethical questions about M4.

Investigators decided to learn more about M4’s daughter and get approval from in-house attorneys to view his personnel file. The personnel file contained information about his spouse and one other dependent, but not his daughter. The investigation team performed a reverse search of electoral rolls using his permanent address. This search only turned up names of other family members, but not the daughter.

We turned to M4’s direct manager for an interview, and he provided invaluable information. The direct manager told us that M4 had been terminated from his previous organization for minor infractions, but the direct manager didn’t know the details. The direct manager then told us that M4 had been hired by the company based on the trust the business head had in M4’s abilities. M4’s direct manager didn’t say whether he’d been in favor of hiring M4, but he did confirm that M4’s daughter lived and worked in New York. He also told us that he was aware of the vendor’s existence. It’s important to note here that India is a relationship country, and it’s not unusual for people to prefer to work with people they’re familiar with, unless there’s a perceived or actual conflict of interest.

Did the new information about M4’s termination suggest anything relevant to our investigation, and should the investigation team have interviewed his direct manager earlier in the investigation? These are important questions; however, we apprised his direct manager of the situation at the outset, as is best practice. We also informed him of the other questions that had been raised during the course of the investigation.

The only step remaining in the investigation was an interview with M4. We carefully crafted the questions, starting with the less serious matters of using subordinates to purchase food or clothing for personal use, then questions pertaining to the vendor, and finally, questions about the harassment allegations. The investigator and the manager intended to attend the interview to provide backup should the interview go sideways.

A meeting with M4

The interview with M4 lasted four hours. At first, M4 cheerfully volunteered information about the purchase of the silk garments and the food orders. He was quite forthcoming when he offered up information about his “addiction to a good cup of tea,” and how he’d even have senior members of his team buy him a cup and bring it to him. He admitted that he’d also asked those senior members to return the dirty teacups to the cafeteria — a sign of disrespect in India. Despite his discourtesy, M4 presented himself as a much-loved leader with a team of people happy to bus his dishes. M4 also claimed that he intended to pay for the silk but forgot due to his exceptionally busy schedule and promised to settle his debt immediately following the interview.

But as we moved on to the vendor question, M4 shifted uncomfortably in his seat and became markedly reticent. His answers were terse. We noted the changes in M4’s body language and tone, but continued to focus on gathering the facts from him.

A series of open-ended questions during the interview revealed that the vendor in question was managed by a former colleague of M4. The former colleague was based in New York and was the local guardian of M4’s daughter. M4 confirmed that he introduced the vendor to the company, and, as the onboarding process is lengthy, M4 suggested they conduct a PoC so that the vendor could demonstrate the value of its work to the organization.

The interview then turned to questions about his daughter, and M4 confirmed that she was working in New York and financially independent. Then we threw M4 a curveball of a question — we asked M4 if we could see his daughter’s LinkedIn profile. M4 reluctantly showed us the profile, which revealed that M4’s daughter was the vendor’s employee. M4 asked, “Should I resign?”

Although we took our time with a thorough investigation of all allegations against M4, his tenure with the organization was short-lived. M4’s employment was terminated.

He insisted that he had consulted with the senior procurement manager during lunch, who told him that it wasn’t a conflict of interest if he hired his daughter’s employer for the job. To maintain his distance from the vendor and keep everything above board, M4 said he assigned his deputy, M1, to oversee the engagement.

The interview grew even more tense as the questions turned to the harassment allegations. It was at this point that M4 stopped answering our questions.

Although we took our time with a thorough investigation of all allegations against M4, his tenure with the organization was short-lived. M4’s employment was terminated.

We then conducted a follow-up interview with the senior procurement manager to confirm the lunchtime discussion about the conflict of interest with M4. He denied ever discussing M4’s daughter’s employer and noted that conflicts of interest weren’t appropriate lunchtime discussion.

Understanding the POSH Act

Even though the female employees in this case ultimately declined filing sexual harassment complaints against M4, it was still necessary for us to understand and comply with the POSH Act to ensure that we weren’t overstepping bounds or taking a misstep while conducting our investigation.

The POSH Act figures prominently in many workplace investigations of misconduct in India. In fact, a recent study found an increase in the number of workplace sexual harassment cases reported in India under the law. (See “POSH Act Cases Have Risen Over the Last Decade, But Where Did They Come From?” by Akshi Chawla, CEDA, The Wire, May 18, 2024.) It’s important to keep the Act’s provisions in mind when allegations of sexual harassment come to light, either as standalone allegations or as part of a larger investigation regarding other matters.

The law requires companies with 10 or more employees to constitute a committee called the Internal Complaints Committee (ICC) to address complaints of sexual harassment in the workplace. At least half of the ICC members must be women and the committee must be headed by a female presiding officer who is a senior leader in the organization. The ICC must include at least two employee members committed to women’s causes, or who have experience in social work or legal knowledge. In addition, the ICC must include one external member from a nongovernmental organization or association committed to the cause of women or a professional familiar with issues relating to sexual harassment.

The ICC must complete the inquiry within 90 days of receiving the complaint. The committee must share its findings with the employer within 10 days of concluding the inquiry, and any recommendations made by the ICC should be implemented by the company within 60 days of completing the inquiry.

Inappropriate touches, demands or requests for sexual favors, inappropriate comments that are sexual in nature, online sexual harassment, nonverbal conduct, such as glaring, winking or any other action with a sexual connotation, are all covered by the POSH Act. As such, the definition of sexual harassment is broad. If you’re conducting a sexual harassment inquiry, it’s best to consult sections 2(n) and 3(n) of the POSH Act for further guidance. [See “The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013,” India Code.]

Notably, the POSH Act applies only to women and is gender specific in nature in line with Article 15(3) of the Constitution of India, 1950; however, an organization may broaden the scope to include all genders. Therefore, claims of sexual harassment from men or other genders should be treated as harassment and investigated vis-a-vis the company’s policies and procedures. If the policy of the organization is gender neutral, any person of any gender may file a case of sexual harassment against any person of any gender. This can be done as per the duties laid down for the employer under s.19 of the POSH Act to protect all employees regardless of gender and ensure their right to a safe and healthy workplace.

Any person aggrieved by an order of the ICC may appeal to the court or tribunal in accordance with the provisions of the service rules or to the applicable appellate authority within a period of 90 days from the date of the recommendations handed down by the ICC.

All states in India require that an employer’s ICC must report annually to a district officer regarding sexual harassment investigations. The following must be reported:

• Number of complaints of sexual harassment received each year.
• Number of complaints rejected each year.
• Number of cases pending more than 90 days.
• Number of sexual harassment workshops or awareness programs carried out in the year.
• Number of actions taken by the employer or district officer.

As M4’s case shows, an allegation of one type of misconduct can lead to discovering other types of misconduct, ethical concerns and compliance issues. In this particular case, following the laws and regulations governing how employees are treated in the workplace was essential to resolving the matter.

One final word: Investigations involving interpersonal matters and workplace misconduct are often complex and emotionally taxing. As compliance professionals and fraud examiners, we excel at investigating irregularities and understanding the details of a case, but we’re not always prepared for the significant toll these investigations can take on our emotional well-being. If you’re conducting an inquiry related to any sort of workplace misconduct, and especially those concerning harassment allegations, it’s important to take care of yourself as you would take care in complying with the specific laws and regulations related to the case.

Radhika Vohra, CFE, is a former executive director for Wells Fargo’s Conduct Management practice in India and the Philippines and is a former senior manager of Microsoft’s Business Conduct Investigations team. Contact her at radhikavohra2013@gmail.com.