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The Ins and Outs of Investigations

Each New Year has traditionally been the time when we revisit best practices for handling human resource issues. In keeping with that tradition, this month we're addressing best practices for conducting internal investigations, including whether it is a wise practice for management to publicize employee disciplinary reports.

Monday, December 28, 2009
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Question: What are the best practices an employer should follow when conducting an internal investigation into a claim of harassment and or discrimination?

Answer: An Internal investigation is a tool that employers can use not only to explore potential problems in the workplace, but also to shelter themselves from liability in future litigation. 

If done correctly, an investigation into a claim of harassment/discrimination can substantially limit an employer's liability for the conduct alleged. In 1998, the U.S. Supreme Court articulated what has now become known as the Faragher-Ellerth affirmative defense for employers. Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998). 

Specifically, where an employee alleges a hostile work environment created by a supervisor, the employer may have an affirmative defense (and therefore avoid liability for the acts of the supervisor) if it can show that (1) it exercised reasonable care to prevent and promptly correct any discriminatory behavior and (2) the employee unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer. 

This defense is available, however, only where the harassment/discrimination did not result in the complaining employee being subjected to a tangible employment action such as termination, suspension or loss of compensation. 

A key way for an employer to demonstrate that it exercised such reasonable care and to, thereby, satisfy the first requirement of the Faragher-Ellerth affirmative defense is to conduct a timely and proper internal investigation. 

When to Investigate

An employer's duty to investigate begins as soon as evidence of discrimination becomes known to the employer (management). It is important to understand that an employee does not have to make a formal complaint in order for the employer's duty to kick-in. 

Once the employer has knowledge of the issue, whether it's actual knowledge (i.e., the employer is made specifically and directly aware of the situation) or constructive knowledge (i.e., the employer is presumed to have knowledge because exercise of reasonable care would have made the employer aware), the employer should take prompt action. 

Conducting a proper internal investigation is not only a best practice, but is also invaluable to the defense if litigation later arises. This is because, when assessing discrimination and harassment cases, judges and juries will always critique how an employer responded upon first hearing of the allegations of harassment/discrimination.

How to Investigate

The primary goal of an internal investigation is to determine the credibility and merits of the employee's allegations. The tactics used to reach that goal, however, can significantly affect the legitimacy of the investigative process and any final determination that is reached. 

The information and protections provided by an internal investigation are only as good as the adequacy of investigation itself. For these reasons, when conducting internal investigations, the following list of best practices is a helpful guide.

* Promptness: An investigation that is started and concluded promptly, carries the hallmark of a well-conducted investigation. Once an employer has knowledge of discriminatory behavior -- whether actual or constructive -- it should immediately initiate the investigative process. 

Promptness shows that the employer is interested in the welfare of its employees, both by addressing employee concerns without delay, and ensuring that it maintains a discrimination-free workplace.

* Unbiased and Impartial: One of the most important steps an employer can take to ensuring the credibility of its investigation is to choose an impartial and unbiased investigator. The investigator should be someone with good interpersonal skills, a good listener, discreet, detail-oriented and a good witness, should litigation later arise. 

The investigator should also be familiar with the employer's policies and procedures, especially concerning claims of discrimination. Potential candidates may include: outside counsel, in-house counsel, third-party investigators, HR representatives and general managers. 

No matter who is chosen, always make sure the investigator has no prior, personal knowledge of -- or involvement with -- the allegations; has no ties, beyond a general working relationship, to the employees involved; and has no possible stake in resolution of the matter. 

* Thoroughness: Because the main goal of an internal investigation is to substantiate or invalidate an employee's allegations, thoroughness is vital. 

The first step is to properly define the scope of the investigation. This includes decisions concerning who will be interviewed (for example, the complainant, the accused, their supervisors, other employees/co-workers who may have witnessed the alleged conduct) and what documents will be reviewed as part of the investigation (for example, personnel files, managers' desk files, expense reports, organizational charts, floor plans, employee lists, internal memos, e-mails and recorded voice messages).

The nature of the allegations, the parties involved and the departments they work in, will largely decide the answers to these questions. 

Among the facts that should be sought during the investigation are: (1) how and when the matter came to the employer's attention; (2) a chronology of relevant events; (3) the reporting, work and personal relationships of the witnesses; (4) the work history of the complainant, the accused and key witnesses; and (5) the context, timing and location of the incidents. Under all circumstances, the investigator should try to gather as many details as possible.

* Documentation: Coinciding with the concept of thoroughness, is documentation. The investigator should take complete and accurate notes during all phases of the investigation, especially interviews and reviews of documents. 

Documenting the investigation is important for two reasons: First, documentation gives support and credibility to the investigator's ultimate conclusion and, second, it captures the thoroughness of the investigation if litigation later ensues.

All documentation should list the date, the individual being interviewed, the length of the interview, the names of everyone present at the interview (including the note-taker) and any other information that is gathered. At the end of the investigation, the investigator should use the documentation to draft a final investigation report that summarizes the investigation, the results and the basis for the investigator's conclusion. 

 

* Confidentiality: While an investigator should make every attempt to keep the information learned during the investigation confidential, he or she should never promise confidentiality to the complainant, the accused or any witnesses. 

Confidentiality is often an important issue in internal investigations because most employees do not feel comfortable speaking truthfully about their work environment without some guarantee of protection. It is best for the investigator to explain that his or her records are kept confidential and that the witness should feel free to speak truthfully with him or her without fear of retaliation. 

However, because internal investigations are sometimes precursors to litigation, the investigator should explain that if litigation later arises, confidentiality cannot be guaranteed. Investigators should also remind witnesses that the information they are asked about should not to be discussed with other employees. 

* Compliance with Company Policies: If the employer has policies concerning internal investigations, the investigator should make every effort to comply with those procedures. Deviation from company procedure could result in further allegations of bias.

In addition, failure to comply with such policies detracts from the employer's credibility, the credibility of the investigation and any final determination that is reached. 

* Conclusions Based on Evidence: After completing all interviews and reviewing all documents, the investigator should come to a determination as to the credibility of the complainant's claims. The investigator must base his or her determination on the evidence (or lack thereof), including consideration of any inconsistencies, bias, motives and overall inherent plausibility. 

The investigator must be able to point to concrete evidence (or the lack thereof) to support his/her conclusions. Reliance on anything else will undermine the determination. 

* Remedial Action: If the investigation reveals that inappropriate conduct occurred, the employer must take prompt remedial action against the guilty party(s). The employer must ensure that any disciplinary measures are clearly communicated to the affected individuals, as well as the severity of future discipline in the event of further grievances. 

When fashioning the appropriate remedy, the employer should consider whether the discipline fits the offense, whether it is appropriate for the individual(s) involved and whether it is consistent with action taken in prior, similar situations. 

While disciplinary action can take many forms, the most common include: sensitivity training and/or counseling; reprimanding and instructing the accused to avoid contact with the claimant; changing reporting relationships; initiating probation, suspension, demotion or transfer of the accused; denial of salary increase or bonus; discharge; or permitting a voluntary resignation. 

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* Communication of Results: The results of the investigation should be summarized in a final investigation report that includes the investigator's determination, the basis for the conclusion and the credibility of the evidence that was relied-upon.

To ensure confidentiality to the greatest extent possible, the results of the investigation should be disseminated on a strict need-to-know basis, including to the complainant, the accused and any necessary management personnel.

The investigator should also prepare a final summary at the end of the matter, including any remedial measures taken (or that no action was required) and why. The final report should also include documentation of the fact that the claimant and accused were advised of the investigation's conclusion. 

Additional Tips

In addition to those guidelines, the following eight additional tips should be adopted when conducting investigations: 

* At the start of the investigation, determine if interim action, during the course of the investigation, is necessary. For example, transferring the claimant to a new department or supervisor, or requesting that the accused take administrative leave.

* When selecting the place for witness interviews, choose a location that is private, neutral and without distractions. Make sure the atmosphere is comfortable, but professional.

* Whenever possible, the complaining employee should be interviewed first so that the investigator can fully understand his or her allegations. Once the complainant has been interviewed, it is generally customary for any potential witnesses to be interviewed, followed by the accused. Accommodations for employee schedules should be made whenever possible.

* The investigator should advise all interviewees of the purpose of the investigation, his/her role as the investigator and the employer's no-tolerance policy for retaliation. Be explicit that participation in the investigation will not in any way affect a witness' employment (i.e., there will be no retaliation). 

* At all times, the investigator should use neutral terms and ask non-leading questions.

* Investigators should circle back to each interviewee and conduct follow-up interviews when needed throughout the investigation. Oftentimes, it takes more than one interview to get the total picture.

* At the conclusion of the investigation, the investigator should provide each interviewee with his/her contact information and request that the interviewee contact him/her if there are any additional questions or concerns, or if the interviewee remembers more information that was not shared during the interview.

* I can't say it enough -- DOCUMENT EVERYTHING.

Question: What are the legal ramifications of an employer's practice of publicly posting employee disciplinary reports for all co-workers to see?

Answer: It is neither a best practice -- nor even a good practice -- to publically post employee disciplinary reports. While embarrassment by means of publicly displaying employee disciplinary reports may seem like an effective deterrent against future acts, the negative consequences of posting disciplinary reports will almost always prove worse than the problem that called for the discipline in the first place. 

For example, an employee whose disciplinary report is posted for all of his or her co-workers to see may feel that he or she is being singled-out and humiliated because of membership in a protected category (race, age, gender, religion, etc.) and bring a claim for discrimination. 

Alternatively, even if the employee does not feel that he is being singled-out, he could still have viable state law claims for defamation, invasion of privacy, false light and even intentional infliction of emotional distress. 

It is important to remember that the purpose of discipline in the employment context is to bring the unwanted behavior to the employee's attention and prevent future occurrences. It is not to punish the employee by way of embarrassment or humiliation.

As an alterative to publicly posting disciplinary reports, the employer should consider requiring the offending employee to attend otherwise optional training or counseling sessions. Employees who see their co-workers attending these classes will likely understand the deterrent effect, without the employer exposing itself to potential liability. 

Keisha-Ann G. Gray is senior counsel in the Labor & Employment Law Department of Proskauer Rose in New York and co-chair of the Department's Employment Litigation and Arbitration Practice Group.

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