Four Arrangements, One Agency License
Prairie Watch Investigations, a North Dakota-licensed agency, is reviewing four arrangements. (a) A Minnesota firm with no North Dakota license wants to send its investigator into North Dakota for three days of surveillance on a Minot workers' compensation claim; Prairie Watch would bill the client and pay the Minnesota firm a flat fee. (b) A vendor that only pulls public court records and credit reports for pre-employment screening wants Prairie Watch to resell its reports under Prairie Watch's name. (c) A North Dakota retailer wants Prairie Watch to 'sponsor' its in-house loss-prevention manager, a full-time store employee, so he can interview a suspected employee about a $6,200 cash shortage and sign a report as a 'licensed investigator.' (d) A local process server who holds no investigator license asks to be listed on Prairie Watch's website under 'Our Investigative Team.'
1. For each of the four arrangements, decide whether a North Dakota investigator license is required and explain the reasoning.
Read the worked answer
(a) Surveillance by the Minnesota investigator - license required. The trigger is not residency, it is conduct: investigating for hire inside North Dakota. An out-of-state credential does not travel with the investigator unless the Board's rules provide a specific registration or reciprocity path, so Prairie Watch must confirm that with the Board before the trip, not after. Prairie Watch is the contracting party and would be laundering unlicensed work through its own license.
(b) Reselling public-records and credit reports - likely outside the investigator license, but not outside the law. A business that only furnishes public-record or consumer-report data is generally treated as a data provider rather than an investigative agency. The real exposure is federal consumer-reporting law: pre-employment screening carries disclosure, authorization, and adverse-action obligations that a small agency often documents badly. Take it on only with a compliance review and a written vendor agreement.
(c) The retailer's loss-prevention manager - no license needed for his own employer's internal matter, but the packaging is fatal. An employee investigating his own company's cash shortage is generally within the in-house exemption. What is not permissible is Prairie Watch selling a 'sponsorship' that lends its credential, or the manager signing a report as a 'licensed investigator' when he holds nothing. That is a misrepresentation in a document likely to end up in an unemployment or criminal proceeding.
(d) Website listing - no license, and don't list him. Advertising a non-licensee as part of the investigative team misleads the public and implies agency supervision that does not exist.
2. What is Prairie Watch's responsibility when it subcontracts investigative work, and what should be in the file before any subcontractor starts?
Read the worked answer
The agency cannot transfer its compliance obligation with the work. When Prairie Watch bills a client for investigative services, it is answerable for how those services are delivered, including who delivered them. 'We subcontracted it' is an explanation, not a defense.
Before the subcontractor starts, the file should contain:
- A verified, current North Dakota license for the individual and, if the subcontractor operates as a business, for the entity. Verify against the Board's own lookup, print or save the result with the date, and re-verify at renewal.
- A written subcontract that names the licensee who will actually perform the work, requires compliance with North Dakota law and Board rules, requires immediate notice if the license lapses or is disciplined, and allocates confidentiality obligations to the client.
- Certificates of insurance matching the scope of the engagement.
- A confidentiality and conflicts attestation - particularly important in workers' compensation and domestic matters, where the same subject may be under investigation by more than one party.
- A defined deliverable standard: who writes the report, whose name it goes out under, and who is available to testify.
For arrangement (a) specifically: if the Minnesota firm cannot obtain North Dakota licensure in time, the clean options are to decline the engagement or to have a North Dakota-licensed Prairie Watch investigator do the fieldwork. Do not run the surveillance and paper it over.