When a company receives information concerning potentially hidden wrongdoing, the old axiom, “the cover-up is worse than the crime,” becomes top of mind. To be sure, this principle should be a guiding force when an employer conducts a workplace investigation of reported misconduct. Below are five things every employer must know when misconduct in the workplace is reported.
1. Conduct an Investigation
A properly conducted investigation can reveal the nature and extent of any wrongdoing, result in accountability for individual(s) involved, and foster a safe, inclusive, and healthy work environment for company employees. The business and financial benefits of conducting an appropriate workplace investigation are equally compelling. Indeed, the difference between exposure to financial liability stemming from employee misconduct or avoiding such risk often rests in whether and how the employer handled an investigation. For example, proper and thorough investigations decrease the likelihood that the employee complaining of misconduct will file a charge of discrimination with the EEOC or other agency. Additionally, evidence the employer conducted a thorough investigation of purported misconduct or malfeasance can mitigate the threat of a punitive damages award. Moreover, certain defenses to liability are unavailable to employers that fail to conduct investigations. Specifically, the ‘Farager/Ellerth’ defense—which can shield an employer from liability in harassment cases—requires an employer conduct a prompt, appropriate investigation of the alleged misconduct.
2. Begin the Investigation Promptly
Investigations into misconduct should begin as soon as reasonably possible after the alleged misconduct is reported to preserve certain defenses. While no explicit rule for “promptness” exists, courts have often held that an employer’s response must occur within days of receiving notice of the alleged issue. The Ninth Circuit Court of Appeals, for example, held that an employer’s response was sufficient when it began an investigation into reported sexual harassment within three days. Conversely, the Southern District of New York held that an investigation that was initiated four weeks after a harassment complaint was not sufficiently ‘prompt.’ The purpose underlying these response rates is for the company to consider the reported conduct, determine the facts and, where appropriate, take action.
3. Determine Who Should Conduct the Investigation
In general, most businesses face three choices with respect to who performs the investigation: (1) internal employees/business people, (2) in-house counsel, or (3) outside counsel. Executives, for example, should almost never conduct investigations of serious misconduct because they may become fact witnesses subject to questioning at deposition or trial. Further, business people may often be seen as biased towards the employer and against the complainant. In-house lawyers have the benefit of familiarity with the personnel, structure, and policies of the business being investigated, but also may be viewed as biased. In addition, while in-house counsel may attempt to cloak the investigation in the privilege, many courts have found the efforts of in-house counsel to be “business” advice, not legal advice. By contrast the ultimate results of an investigation undertaken by outside lawyers may be more easily protected—if necessary—by the attorney/client privilege.
4. Know the Basics before Meeting with Witnesses
Employers should know and understand certain basic tenets before interviewing witnesses as part of a workplace investigation. For example, the interviewer should inform each witness/employee that their statements may not be completely confidential. Employers may wish to instruct the witness to maintain the confidentiality of the interview and investigation to protect the attorney-client privilege, prevent subsequent witnesses from learning of the investigation, and minimize the possibility of leaks. However, the National Labor Relations Board (NLRB) has held that blanket confidentiality mandates are unlawful and that an employer must provide a “legitimate business justification” for any such confidentiality instruction. These justifications may include preventing evidence from being destroyed, protecting witnesses, or avoiding a cover-up. Similarly, if counsel for the company is conducting the investigation, the witnesses should be advised that the lawyer represents the company, not the witness, and that any attorney-client privilege belongs to the company, not the witness. Finally, if possible include a third person in the interview who can take notes and, if needed, resolve any future disputes about what may have been said.
5. Craft Policies for Effective Investigations
Well-drafted policies governing workplace investigations can be crucial to their ultimate effectiveness—both during the investigative process and afterwards. An employer that lacks policies or procedures governing investigations risks generating an incomplete and poorly-done inquiry that may not stand up to scrutiny. Such policies also serve as training tools for the inexperienced and can provide needed guidance. Ultimately, having guideposts in your company policies for investigative procedures will prove beneficial in both the short and long term.