Non-Bulletproof Internally-Conducted Workplace Investigations Jeopardize Employers' Defenses.

Lisa Sherman
California Labor & Employment Attorney

While California employment laws require an employer to conduct a "prompt and thorough" investigation of any alleged conduct which may constitute unlawful harassment, discrimination and/or retaliation, anytime an employee claims, directly or indirectly, that he/she feels mistreated in any manner in the workplace, the reality is that failure to conduct an investigation, even if not required, leaves the employer exposed in subsequent legal action.  Likewise, anytime an employer learns, directly or indirectly, of alleged misconduct or potentially unlawful conduct by employees in the workplace, an investigation of the allegations, upon which the employer will rely upon, is the best defense.

However, not every investigation resembles the ones conducted on television shows like, CSI.  Investigations may begin and end after one meeting with the employee, if the basis of his/her beliefs do not raise any allegations of unlawful conduct or violations of Company policies.  In that case, documentation to the file will end the investigation.  

Penetrable Internally-Conducted Workplace Investigations Weaken Employers' Defenses.

Recent California cases have held that an employer’s inadequate or incomplete investigation is, in and of itself, evidence that an employee’s termination was a pretext for unlawful conduct.  Even where the employer concluded that the complainant and alleged harasser engaged in unprofessional behavior, firing both of them, a California Court of Appeals concluded that the employer “did not value the discovery of the truth so much as a way to clean up the mess that was uncovered.” 

The most common challenges to employer investigations that California Courts have embraced include:

  • Timing of Investigation was Not Prompt- any delay from the date when the employer was put on notice to launching the investigation will raise claims that the investigation was legally non-compliant;
  • Designated Investigator was Improper - anytime an internal employee, including, human resources personnel, is selected to investigate, an actual or potential conflict of interest or bias will be raised if the investigator has any prior professional or personal relationship with any of the parties or key witnesses, the investigator is involved in the chain of command for either party, or has any involvement whatsoever with any of the issues being investigated;
  • Designated Investigator was Unqualified- the designated investigator, such as a supervisor, lacks requisite knowledge of the substantive laws at issue and/or the requirements to conduct a legally compliant investigation. This is typically raised anytime the investigation deviates from state and federal legal requirements, recommended best practices and/or the investigator is not an employment attorney trained in conducting investigations who has performed previous investigations and received some sort of investigative and employment law training;
  • Authenticity and Content of the Evidence Relied upon by the Investigator Tainted the Entire Investigation.  The failure by the Company to properly select and preserve all potentially relevant evidence and collect electronically stored information (ESI) relevant to the investigation in a defensible manner (in its original state with metadata intact) jeopardizes the admissibility of the ESI the employer intends to rely upon if litigation follows.  Common errors include selective collection by interested persons of what they perceive to be relevant which often excludes anything potentially incriminating; interested parties and witnesses forward emails, texts or take screenshots, for example, of personal cell phones, that change or add to the metadata and/or puts into question the ESI's authenticity.  Where critical evidence is not provided to the investigator or properly preserved and opposing parties produce it in subsequent litigation, the incomplete investigation will be used against the employer. To the extent the ESI no longer exists or is altered in anyway, the employer may face sanctions for spoliation of evidence;
  • Communications with the Complainant Employee, Accused and Participants in the Investigation regarding the Investigative Process Reveal Fatal Flaws Jeopardizing Reliance on the Investigation.  Common challenges include lack of notice to the complainant employee and accused of the investigation process and allegations; failure to remove the accused, actual or potential witnesses from discussions and decision-making related to the investigation; failure to protect confidentiality by only disclosing information raised in the allegations that are required to conduct the investigation, limited only to persons with a need-to-know.  Communications with witnesses regarding the process and substance of allegations will be attacked where admonitions at the investigative interview were insufficient; questioning calls into question the investigator's objectivity or lack of follow-up.  Failure to provide one or more of the parties a full and fair opportunity to present and respond to the allegations will likely be raised in litigation if the documented file fails to record that each party and witness were asked to provide all evidence that supports and/or refutes the allegations and/or defenses, and all persons believed to have relevant knowledge and their expected knowledge. Additionally, failure to communicate the findings and conclusions of the investigation to the parties at all, or improperly, for example, by violating privacy rights, will subject the employer's investigation to attack;
  • Factual Findings, Determinations, Conclusions Reached and Actions, if Any, Taken Call the Entire Investigation into Question.  In addition to the above challenges, anytime factual findings, determinations, and conclusions are not reached at all, or are reached, but the evidence relied upon is not what it purports to be, or does not support the findings, the entire investigation will be challenged, with the opposing party seeking exclusion of the entire investigation in litigation.  Common issues include: no findings or findings based, in whole or in part, on subjective and/or unsubstantiated credibility findings; ignoring or not obtaining critical relevant evidence; not seeking corroboration, or lack of follow up; failure to take corrective or remedial action for violations; post-investigation violations occur and remain unremedied; claims of retaliation, or appearance of retaliation, against complainant, participants in the investigation and/or accused during or after the investigation tainted the entire investigation. Even failure by the employer to take additional actions to minimize future issues from reoccurring and failure to monitor the situation after the investigation to ensure that all involved are not subjected to any subsequent unlawful conduct have put an employer's investigation at issue; 
  • Contents of the Investigation File, including, all Documentation, Communications, Notes of Witness Interviews, and Recordkeeping from Beginning to the End of the Investigation Threaten the Employer's Reliance on the Investigation.  If the contents of the investigation file are not bulletproof, the entire investigation will be subject to attack. The file must document the investigation from start to finish that in and of itself shows prompt launch, thoroughness, and findings based on relevant evidence.  The most common errors include failure to document intake, scope, investigative plan, moving the process forward, all relevant evidence requested and received, from whom, how it was provided, selected, collected and reviewed, as well as, the authentication/admissibility of all evidence relied upon. Failure to document the reasons why all relevant witnesses were not interviewed, or reinterviewed, on critical matters will also be raised. Failure to document the investigative process from start to finish, including, any failure to follow-up and take action to minimize reoccurrences, have successfully challenged an employer's investigation. 

Properly-Conducted Investigations Yield Significant Benefits that Go Far Beyond Refuting Employer Liability. 

Every investigation must be performed by well-trained personnel, who are not only qualified and competent, but the investigator must present well to a jury, maintaining professionalism and keeping his/her composure at all times to withstand a ferocious attack of his/her investigation, if legal action follows.  Given the importance of the investigation to any employer in potential legal actions, an employer's investigation stands a much stronger chance of withstanding scrutiny when an experienced outside investigator (preferably an employment attorney) is retained to conduct the investigation.  However, if an internal investigator is qualified, experienced, and no conflict of interests exists with the parties or issues, the employer should retain experienced employment counsel to direct the investigation under the attorney-client privilege minimizing challenges to the investigation itself. If litigation follows, the employer will likely waive the attorney-client privilege, so that they can rely on it in litigation, but it is far more likely to withstand attack with counsel directing it. 

It may cost a little more to conduct investigations with counsel involved, but consider the alternative: substantial verdicts or enhanced settlements based upon inadequacies in the investigation itself that jeopardize the employers' defenses.  Investigations directed or conducted by experienced employment attorneys like ourselves, also provide additional benefits beyond supporting the employer's defenses. These include:

  • Deterring litigation attacking the investigation as the outside investigator, who has no ties to either party, will testify as a witness on the investigation if legal action follows;
  • Investigations convey a strong message to employees that their voices are heard, and that unlawful conduct and retaliation will not be tolerated;
  • Investigations provide an opportunity to educate employees and help solve problems within the organization;
  • Investigations allow external investigators to uncover previously unknown issues and present them to the employer to correct them;
  • Employee morale and productivity often times, improve, no matter what the outcome, because the process itself renews employees’ self-worth at the Company and the process.   

Lisa Sherman is certified to conduct complex workplace investigations by the Association of Workplace Investigators, where she is also a member and has presented as a speaker at its annual conference on digital evidence in workplace investigations. All of our employment law attorneys are well-trained in directing and conducting independent attorney-client privileged investigations. 

Before you initiate your next investigation of a workplace matter, we invite you to contact us at (213) 341-4417.  We would be happy to discuss with you further conducting legally-compliant workplace investigations that protect your Company.  Our initial consultation will cost you nothing.