When an employee is suspected of wrongdoing, a typical response is to conduct a workplace investigation. In China, this process is tightly regulated and creates risks of privacy violation claims and, more importantly that your evidence will be thrown out. Chinese courts will closely review surveillance methods and collection processes for legal compliance before admitting the related evidence. The value created by a competent investigation, therefore, is establishing a paper trail that will stand up to a legal challenge. In this article, we will explain how workplace investigations are required to be performed in China, discuss best practices for collecting evidence, and explain how to avoid spoiling evidence.
Contents
Collecting Evidence
Upon discovering misconduct leads, a company should define the investigation’s scope, identify subjects, custodians, and departments, then assemble an investigation team of internal staff and outside advisors. The investigation plan should balance speed, confidentiality, and feasibility. The process typically includes preliminary evidence collection, preparation of interview summaries, targeted interviews, findings development, assessment of the employment relationship, and accountability and corrective actions.
Of these steps, evidence collection and interviews are critical to holding employees accountable. Compliance investigations can proceed through both external and internal approaches. External investigations focus on acquiring information about the subject employee through public information searches. Internal investigations involve internal documents, e-discovery, and employee interviews. Together, the approaches enable comprehensive, accurate information collection.
Ideally, these steps should be undertaken by a qualified expert to avoid risk of legal liability for making mistakes. If you need help finding an expert for workplace investigations or other legal matters in China, please visit CBL’s Legal Services page to learn how we can help.
External Investigations
Public information searches facilitate employee misconduct investigations; they identify businesses and products associated with the subject to determine whether it is in a similar line of business or make similar products, and whether the subject is among their shareholders or employees. Investigation subjects and custodians may share office addresses, residences, contacts, or even phone numbers in business registrations.
From this, investigators may uncover links among external parties, behavioral patterns, and entities’ actual controllers. Searching court cases involving the competing business entity may reveal leads such as the subject employee representing the company in a related case, which helps identify connections between the subject employee and the competing business.
A good illustration of how this works is Shanghai Case No. 0115-cv-80588 (2023), where a company found that its former employee, Dong, bound by a non-compete, joined competitors Company A and Company B after resigning.[1] During its investigation, the company searched the competitors’ public business information and obtained a corporate prospectus stating that Company A was its wholly owned subsidiary and Company B its affiliate. The corporation’s core business closely matched that of the company, including biopharmaceuticals and contract development and manufacturing services.
The case shows that public information searches are essential to compliance investigations. They help gather external information, which can be used to assess the potential misconduct and connections with external parties such as competitors, suppliers, and clients. Common types of public information and sources include:
- Business information, covering company addresses, shareholders, management, registered capital, and permitted business activities, through the National Business Credit Lookup System, Qichacha, Tianyancha, and other similar platforms;
- Intellectual property information like patent and trademark registrations; disputes through China Judgments Online;
- Public filings and securities records, such as the China Securities Regulatory Commission website and securities trading websites;
- Other information, including individuals’ social media content, such as WeChat Moments, WeChat Channels, and short-video platforms.
Employee misconduct often involves activities outside the workplace, so compliant investigations into these activities are also important.
Evidence must be collected in compliance with the law. In Jiangsu Case No. 05-cv-1938 (2022), the court noted that in non-compete cases, surveillance videos must be reviewed for legality, including whether the imaged area and the collection method infringe personal privacy.[2] However, courts do not automatically reject videos recorded in public areas if they are used to prove breach of non-competes, such as employees entering competitors’ offices.
Instead, the courts will assess if the video was recorded from a fixed area in a public place, whether it shows private spaces, private activities, or intimate areas of the body, whether it was recorded for a reasonable purpose, and whether it was used for any illegitimate purpose unconnected to proving the disputed facts. If the collection approach is lawful and does not violate public morals, and the harm to the employee’s rights is substantially less than the interest served by admitting the evidence, the evidence may be used as proof under the balancing test.
Gather evidence of external non-compliant conduct by acquiring the relevant products. In some precedents, companies had to obtain relevant products or services to show the target company’s business operations or the subject’s infringement.
For example, in Supreme Court Intellectual Property Case No. 1590 (2023), the plaintiff, an automobile company, had employees log in to a competitor’s pre-order platform, pay a 3,000-yuan deposit, and order an electric vehicle to gather evidence that the competitor used the trade secrets at issue to manufacture chassis and parts.[3] The company engaged an external notary public to notarize the transaction. The notarial certificate recorded the employees’ purchasing process and the competitor’s name and logo shown on the website. The vehicle purchased was put into storage under a tamper-resistant seal and the notary public witnessed the process of scanning relevant parts of the vehicle to capture screen recordings and survey data.
The above evidence was submitted as proof of trade secret misappropriation to the Chinese Supreme Court, which accepted the evidence and made a judgment on appeal supporting the plaintiff’s claims. Buying the relevant products is a common investigation approach because it can provide direct leads to infringement and misconduct. Companies can decide whether purchasing the products is necessary based on the nature of the case. It is also advisable that the whole process be notarized, and that the purchased products be stored under seal to preserve the evidence’s validity in dispute proceedings.
However, the illegal activities of relevant persons or companies may still be in “stealth mode,” where the products have not been fully developed or held for sale. In the face of obstacles in contacting the relevant parties and obtaining the products, companies should work with professional investigators to develop a feasible plan.
Internal Investigations
Alongside external investigations, companies in China may conduct internal investigations under their own authority and procedures.
Collecting internal documents is essential to compliance investigations. Companies should identify and collect the internal documents relevant to the misconduct to help the investigation team analyze internal policies, standards, and procedures, support findings of misconduct, protect rights, and enforce accountability after the investigation. These may include:
- In confidentiality breach matters, companies can collect confidential information, R&D documents, confidentiality and intellectual property policies, records of internal secrecy policies, confidentiality training materials, non-disclosure agreements with the relevant persons, and employment contracts;
- In employee misconduct matters such as employee theft and kickbacks, companies often need financial and accounting records, transaction contracts, and internal approval and transaction workflows;
- In conflict-of-interest matters, companies can collect information about the relevant persons, conflict-of-interest disclosure records, and conflict-of-interest policies.
E-discovery. In Beijing Case No. 73-cv-584 (2024), the company searched employees’ work computers, internal email, office automation platforms, and other internal information systems by keyword to identify misconduct leads.[4] As technology and corporate cybersecurity improve, we can expect to see internal investigations use e-discovery across the following data sources:
- User logs and user activity traces on devices and networks. For example, logs may show registration, login, and identity verification data; connections to USB or other mobile devices; file access; and use of software or functions such as data clearing and formatting.
- Local device data held by custodians, such as computers, hard drives, and USB drives. This may include documents, videos, programs, and screenshots. The investigation team may also review easily overlooked data, such as recently opened documents, temporary files, hidden folders, and shredded documents, to identify misconduct leads. In addition, keyboard input method editors (IMEs) may store data that provides investigative clues.
- Data stored in the cloud, including email and cloud drives, can be searched and filtered by keyword to develop case leads.
During e-discovery, companies in China must preserve the form, legality, completeness, and authenticity of electronic data without alerting the subjects. You should establish information security management practices in advance, including standards and policies for processing and storing work-related data; prohibitions on using work devices for personal matters; and security audit systems to monitor work computers, printers, USB devices, and other storage media to ensure access to system logs and basic data analysis during an investigation.
Keep e-discovery confidential to avoid alerting subjects, who may compromise electronic data. To ensure professional evidence collection and data integrity, engage IT staff to collect and preserve data, ensuring it is stored, transmitted, and extracted completely and that original storage media is not damaged. To preserve evidentiary value, consider working with forensics vendors and notaries public to collect and notarize the data.
Employee interviews are essential to internal investigations for verifying reports, obtaining explanations, and documenting statements. You should prepare interview plans, summaries, evidence, and contingencies in advance to reduce the risk of collusion and leaks. Interview records should be signed by the employee, and the relevant equipment and data should be handed over if necessary. After each interview, you should review the information and pursue new leads.
Investigation Strategies
Preplan internal investigations through company policies, processes, and documentation. You need to plan compliance investigations in advance by clearly defining misconduct in company policies, specifying the punishments for misconduct, outlining employee cooperation duties, and standardizing information security and work device policies. Once policies are drafted, complete the inclusive notice process and training to ensure legal compliance. Companies can build compliance checkpoints in business processes to record compliance in real time and quickly identify suspicious activity. You can also implement internal audit systems to quickly detect and prevent misconduct.
Ensure investigations remain legally compliant while pursuing thoroughness. To ensure completeness, companies should pursue all misconduct leads, use internal and external investigative methods, gather evidence from all possible sources, and establish a coherent evidentiary chain. This approach helps prevent exclusion of key evidence that could impede the investigation. In terms of legality, ensure evidence collection complies with the law, keep a paper trail for the investigation, and document the evidence to prevent spoilage or confidentiality breaches. When needed, engage a notary public to notarize the collection process and the evidence itself, which could improve the credibility of the evidence and support your claims.
Correct defects in the company’s legal compliance processes after an investigation. After conducting compliance investigations and holding responsible employees accountable, companies should not ease up. Instead, thoroughly examine internal systems for issues like vague rules and technical flaws, and make corrections on that basis to improve the compliance system and culture.
If you need help finding an expert for workplace investigations or other legal matters in China, please visit CBL’s Legal Services page to learn how we can help.
FURTHER READING
Get more insights about Chinese employment law:
Terminating Employees for Disciplinary Violations in China
FOOTNOTES
[1] Shanghai Case No. 0115-cv-80588 (2023), ((2023)沪0115民初80588号), (Shanghai Pudong District Court, Jul. 31, 2024), (in Mandarin)
[2] Jiangsu Case No. 05-cv-1938 (2022), ((2022)苏05民终1938号), (Suzhou Appeals Court, Jul. 20, 2022), (in Mandarin)
[3] Supreme Court Intellectual Property Case No. 1590 (2023), ((2023)最高法知民终1590号), (Supreme Court Intellectual Property Court, Sept. 28, 2025), (in Mandarin)
[4] Beijing Case No. 73-cv-584 (2024), ((2024)京73民终584号), (Beijing Intellectual Property Court, Jun. 25, 2024), (in Mandarin)