Conducting an Effective Internal Investigation - ABA YLD 101 Practice Series

By Andrew M. Schpak

Introduction
The quality of the employer's internal investigation is always relevant in employment discrimination lawsuits. A court's review of the employer's investigation usually arises in one of two ways. First, proof of a competent investigation of an employee complaint shows that the employer took prompt remedial action, which can sometimes serve as an affirmative defense. Second, employees who are terminated as the result of an employer's investigation often cite the inadequacy of the investigation itself as evidence of discrimination or disparate treatment. The goal of this 101 Article is to provide some insight into how courts will evaluate the quality of an internal investigation.

When to Conduct an Investigation
Internal investigations are warranted by any of three occurrences:

  1. instances of known misconduct;
  2. suspected misconduct of which the employer has notice; and
  3. the employer plans to take disciplinary action or adverse employment action against an employee.

Planning the Investigation
Investigations should be done quickly because employee misconduct can be harmful to the organization, the general public, and coworkers. In addition, any delays in gathering information could taint subsequent disciplinary action. When selecting an investigator, choose someone who has institutional credibility, personal credibility, availability, and expertise.

Remember that good investigations take time. If the investigation becomes involved or time consuming, the employer should consider suspending the employee pending the investigation. A suspension with pay shows that the employer is not pre-judging the situation, and prevents employees who may be disciplined later from arguing that the suspension itself constituted discipline. Where suspension is not a viable option, the employer should consider transfers, shift re-arranging, assigning extra supervision, restricting access to loci of trouble, or temporarily limiting the employee's responsibilities.

Chain of Command Decision-Making
Avoid "cat's paw" liability by having a review process of the proposed decision reviewed by someone removed from the situation. Cat's paw liability arises when a decision maker accepts the recommendations of a biased supervisor without conducting an independent investigation or review of the facts. Telephone and email communications are nearly always insufficient to resolve something as important as an employee's termination, especially when those conversations are not subsequently documented in a format suitable for the personnel file.

Maintaining Complete Employee Records
Employee personnel files must contain legible, clear, and specific accountings of every meeting with an employee involving:

  • personnel actions (including positive ones like commendations and certifications);
  • policy and procedure discussions;
  • grievances;
  • investigations; and
  • any other significant work-related events

Interviewing

  • Cover your bases
    Interview all the relevant players - not just the complainant and the accused (although that is a good place to start). Consider team (2-person) interviews. Select interview locations with care. Make sure to remind the complainant that there is a policy against retaliation of any kind, and remind all other people of the policy and that it protects them.
  • Coercion always backfires
    If witnesses need prodding, that is okay, but never threaten a witness in order to extract information. Information gained by threat is given under duress and is likely unreliable. Never threaten employees with criminal prosecution for failure to cooperate. Don't ever create the impression that the employee is not free to leave by locking or blocking doors. Don't ever provide misinformation in an attempt to obtain the truth, such as pretending to have evidence that either doesn't exist or is not in your possession.
  • No false promises
    Employers may have to divulge information learned in the course of an investigation, including the identity of witnesses. Accordingly, don't promise confidentiality. You can and should advise witnesses that you will make every reasonable effort to keep their identities confidential. In addition, witnesses should be contacted before disclosing their names, should that become necessary.
  • Questioning techniques
    Witnesses can aid an investigation in 3 ways:
    1. they can provide background information, such as possible motivations for conduct, and the existence of relationships or alliances;
    2. they can provide direct observations: what they saw, heard, and know to be true; and
    3. they can corroborate or discredit particular versions of events.

Begin interviews with an explanation of the interview process and what you hope to learn. Answer questions honestly and explain when you are not at liberty to answer. Ask open-ended questions. Ask enough background questions for witnesses to add context and fill in blank spots. Ask clarifying questions to understand how witnesses use words (e.g., what do you mean by "yell?"). Make sure to acquire consent if you are going to tape-record the interview.

Protecting the investigation
Make sure to keep investigative documents in a place where only a few people have access. Investigative documents remain sensitive even after the investigation has ended, but must be stored in a retrievable manner or else destroyed. Adopt and follow a logical document destruction policy.

You can attempt to protect investigative documents from discovery through the attorney-client privilege and work-product doctrine. To do so, follow these steps:

  • State when the purpose of a communication is to obtain legal advice.
  • Identify the parties to privileged communications by name and title
  • Mark privileged documents "privileged."
  • Keep facts and opinions segregated; privilege attaches to communications, evaluations, analysis and opinions, but not facts.
  • Limit disclosure to persons outside the scope of the protection.
  • State when the document has been prepared in anticipation of litigation, which can include documents prepared anytime after the employer has identified the likelihood of litigation.
  • Write for an audience; expect that a jury will read and scrutinize your documents as evidence, even if you hope that it will remain privileged.

Close the loop
Before you complete the investigation, summarize your process with the complainant and accused to determine whether they have any complaints about the process, and schedule a debriefing with each of them for after the investigation is complete.

Conclusion
Independent investigations are about process. The law does not require that investigations be error free; it requires that they be independent and fair. Have a solid policy, and include some procedural safeguards, such as:

  • investigations begin with reviewing involved parties' personnel files for completeness
  • complainants and subjects of complaints must be interviewed
  • progressive discipline should be followed
  • disciplinary determinations must be approved in written format prior to execution
  • only certain human resources staff are authorized to conduct investigations

Resources

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About the Author

Andrew M. Schpak is an associate with Barran Liebman LLP in Portland, Oregon, where he practices labor and employment law. Mr. Schpak is admitted to practice in Oregon.

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