The Lapsed License and the 'Independent Researcher'
Dana owns a small NC investigative firm and holds a PPSB private investigator license. Her renewal was due March 31, but she missed it while finishing a surveillance-heavy domestic case. On April 12 she signed a $6,500 contract with a law firm to locate a judgment debtor, and she subcontracted door-knocks and database searches to Marcus, who has never held a PPSB license. Marcus works from home, never meets the client, and is paid 40% of the fee. Dana's website still says 'Licensed NC Investigator - Statewide' and lists her old license number. The law firm's paralegal emails asking for a current license copy and whether Marcus is 'covered.' Dana has already billed 9.5 hours in April and has a deposition scheduled for May 2.
1. Identify the licensing problems in Dana's arrangement and explain why Marcus's 'behind-the-scenes' role does not cure them.
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A license that expired on March 31 is not a license on April 12. By contracting for investigative work, billing 9.5 hours, and advertising herself as licensed, Dana is engaged in unlicensed activity and false advertising. The Board regulates private investigators under Chapter 74C by function, not by job title. Marcus's door-knocks, source selection, and database searches require judgment and are investigative services, not clerical data entry. Paying him a percentage and calling him an independent contractor does not avoid the credential requirement; a licensed agency cannot use an unlicensed contractor to perform licensable work. If Marcus is properly characterized as an employee or associate, he must be registered or licensed as the Board requires. The law firm is relying on a false status, so Dana must correct the record promptly.
2. What should Dana do before the May 2 deposition, and what should she tell the law firm?
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Dana should stop all investigative work immediately, preserve the case file and billing records, and correct the website. She should apply for reinstatement or a new license, complete any required continuing education and fees, and arrange for a currently licensed investigator or agency to handle the debtor matter if the client wants continuity. She should tell the law firm in writing that her license lapsed, that Marcus was not licensed or registered for the work he performed, and that she has stopped work pending resolution. She should not destroy records or backdate anything. At the deposition she must testify truthfully about her license status and Marcus's role. Concealment would worsen Board discipline and could expose her to fraud or fee-disgorgement claims.
3. If Dana had renewed on time but used Marcus only to search public databases, would that change the analysis? Explain by function, not title.
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It might change the degree, but not automatically the result. Purely clerical tasks-opening a database, printing a record at someone else's direction, or entering data-may not require a license. But if Marcus decides which sources to search, interprets results, contacts records custodians, or exercises investigative judgment, he is performing investigative work for compensation. The Board will look at what he actually did, not whether he sat in the office or worked from home. A licensed agency should document the division of duties and confirm registration requirements with the Board before using an unlicensed helper.