The Retail Contract That Isn't Investigation
Your firm holds an Ohio Class A private investigation company license under Revised Code Chapter 4749, and all four field employees hold current PI registrations. A regional distributor offers $58,000 for ten weeks of coverage, 10 p.m. to 6 a.m., five nights a week: one person at the gate checking driver IDs and logging trailers, one walking the dock, both escorting terminated employees to their cars, and "detaining anyone caught taking product until police arrive." The client says, "You're investigators - it's the same thing." Your firm has no security-guard authority and no subcontract with any security guard provider. Two of your employees have never worked a fixed post.
1. Identify the licensing problem in this contract. Which parts, if any, can your Class A firm lawfully perform as written?
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Analyze the function, not the job title. Ohio credentials private investigation and security-guard services separately, and a Class A company credential authorizes investigation - gathering information, interviews, background and claims work - not standing a fixed post to protect property and persons.
- Gate access control, dock patrol, deterrence, and escorts off the property are security-guard functions. Deterrence and access control are the core of guard work, not information gathering. Performing them under a Class A license is work outside the scope of the credential, and the client's belief that it is "the same thing" does not change the analysis.
- What survives: any genuinely investigative piece - e.g., reviewing trailer logs and interviewing drivers to develop information about losses, CCTV review to identify a theft pattern, or an internal theft investigation. Those are information-gathering tasks.
- Employee registration follows the function. An employee registered to perform investigative work is not thereby authorized to perform guard work; registration is function-specific. Staffing the post with PI-registered employees does not cure the company-level gap.
Bottom line: roughly half the contract as written is outside your authority, and the answer to the client is not "yes, same thing" - it is a rewritten scope.
2. The client needs the coverage to start in nine days. Describe two compliant paths to delivery and what you must verify before either is used.
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Path 1 - subcontract to a properly licensed provider.
- Verify the provider's company license and class through the state licensing database, and confirm it covers guard services.
- Confirm every guard assigned holds a current employee registration for guard work.
- Get a certificate of insurance naming your firm as additional insured, and a written subcontract that assigns supervision, use-of-force policy, and incident reporting to the provider.
- Do not use an unlicensed provider as a workaround. Referring or supplying labor to an unlicensed entity to do regulated work exposes both firms to discipline and undercuts your own file.
Path 2 - expand your own authority.
- Apply to add guard authority and register the employees for guard functions; this is a licensing timeline question, not a paperwork formality, so it will not meet a nine-day start.
- Interim answer: deliver only the investigative scope now, and let the client run its own guards or a licensed third party until your authority is in place.
Practical point: the exam-style trap is treating urgency as a substitute for authority. Nine days is a scheduling problem; unlicensed work is a licensing problem.
3. What is wrong with the "detain until police arrive" clause, and what should the revised contract say?
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Three problems, in ascending order of exposure.
- It is a guard function. Detention authority belongs with trained, registered guard personnel operating under a written policy, not with an investigator whose registration covers information gathering.
- The legal authority is narrow. A private person may arrest in limited circumstances (for example, a felony committed or reasonably believed committed, detaining until a warrant can be obtained). It is not a general license to hold shoplifting suspects. A detention that is wrong on the facts, excessive in duration, or applied to the wrong person is a false-imprisonment and assault exposure for the firm and the client.
- Use of force follows the detention. Any physical handling invites a force question, and your firm has no policy, no training record, and likely no coverage for the resulting claim.
Revised language: the investigator observes and documents; suspected theft is reported to the client's designated manager and to police; no employee of the firm will detain, restrain, search, or pursue any person. Put that in the contract and in the post orders so the field employee is not improvising at 2 a.m.