Favorable legal developments and increasing information on best practices make conducting investigations of employee complaints “easier” than ever. Although investigating alleged misconduct is never really easy, recent legislation and court decisions facilitate an investigation that is more streamlined and free of obstacles. Moreover, courts are increasingly rewarding employers who promptly respond to complaints by conducting investigations and imposing corrective action consistent with the findings of the investigation. Additionally, the increasing availability of solid guidance on the process of carrying out the investigation enables employers of all sizes to confidently respond when a complaint is made.
Legal Developments Remove Obstacles
Notice to and Consent of Accused No Longer Required with Outside Investigators
Two legal developments in the past year significantly impact how employers conduct investigations. First, in late 2003, the Fair and Accurate Credit Transactions Act (FACT Act) was signed into law. This welcome legislation amended the Fair Credit Reporting Act (FCRA) to reverse the position that had been taken by the Federal Trade Commission (FTC) in 1999 that required employers to comply with strict notice and consent requirements of the FCRA when using an outside investigator to investigate alleged harassment or discrimination.¹
As interpreted by the FTC prior to the FACT Act, if an employer received a complaint of illegal harassment, and utilized a third party to conduct the investigation, the employer would first have to notify the accused and obtain his or her written consent for the investigation, in order to comply with the FCRA. After the investigation was completed, the employer would have to provide the employee a copy of the investigator’s report prior to taking any adverse employment action against the accused. The report would most likely include names of persons interviewed in the investigation. If the employer took adverse employment action against the accused, the employer would have to provide notice concerning the person who performed the investigation.
This led to dilemmas and undesirable outcomes that many felt were contrary to the purposes and spirit of the FCRA. In several situations in which I was involved as an investigator, it was awkward for the employer to provide the required notice to the accused before beginning interviews, much less obtain consent. Employers were not sure what to do if the accused balked at giving consent or delayed consenting. Moreover, employers worried about having to disclose identities of witnesses to alleged harassers at the close of the investigation. Understandably, they were concerned that the accused might attempt to retaliate against witnesses who provided information against him or her or tamper with evidence or the investigation process.
Some employers decided that the downside of compliance with the FTC’s interpretation outweighed the risk of being charged with non-compliance. These and other employers were no doubt relieved by the passage of the FACT Act. No longer must employers give notice and obtain consent from the accused before proceeding with an investigation. Under the FACT Act, if a third party investigator is used, and the investigation results in adverse action against the accused, the accused is entitled to a summary of the “nature and substance” of the investigator’s report. The FACT Act expressly allows nondisclosure of the names of witnesses. Good investigation practice includes summarizing the findings of any investigation to the accused; thus, compliance with the FACT Act should be relatively easy for employers. Of course, a summary of the findings and general outcome should be communicated to the complainant and the person making such communications should document the fact that this communication occurred.²
Non-union Employees Have No Right to Have Co-Worker at Interview
The National Labor Relations Board (NLRB) handed employers the second of the two positive developments in investigations over the past year. Continuing a sort of legal ping-pong, the NLRB reversed its own position from 2000 in Epilepsy Foundation of Northeast Ohio, 331 NLRB 92 (2000), a decision that itself represented a change of then current law. If there is confusion, it is no wonder.
Stripping the contorted legal history to its essence, in 1975, the United States Supreme Court held that unionized employees have the right to have a co-worker present at an interview related to an investigation of workplace misconduct that could result in the interviewee being disciplined. NLRB v. J. Weingarten, 420 U.S. 251 (1975). This right of union workers has not changed. What the Board has been less than decisive about is whether this right extends to non-union workers.
In Epilepsy Foundation in 2000, the Board decided that non-union employees had the right to representation upon request. Since then, employers have struggled with compliance. If an employee requests representation, and the employer complies, the desired degree of confidentiality surrounding an investigation is clearly harder to maintain. What is to prevent these employee representatives from discussing sensitive information to which they are exposed in the employee interview? If the employer foregoes the interview rather than conduct it in the presence of the employee representative, the investigation may be severely undermined. If the employer denies the employee request, proceeds with the interview, and imposes disciplinary action, the employer may be charged with an unfair labor practice, resulting in a reversal of the discipline.
This is the risk that IBM Corporation took that ultimately led to the latest decision by the Board. In IBM Corporation, 341 NLRB No. 148 (2004), three non-union IBM employees were interviewed after the company received a letter from a former employee alleging illegal harassment. The employees accused of misconduct did not request to have a co-worker present during their initial interviews. When the company conducted a second set of interviews with the employees, however, they requested co-worker representation. IBM denied their requests and the employees were discharged for misconduct. The terminated employees filed unfair labor practice charges with the Board, relying on Epilepsy Foundation.
The Board, by a 3-2 decision, found that the “right of an employee to a co-worker’s presence in the absence of a union is outweighed by an employer’s right to conduct prompt, efficient, thorough, and confidential workplace investigations.” Clearly, having a third party present who has nothing to do with the facts of the matter being investigated does nothing to serve the goal of a prompt, efficient, thorough, and confidential investigation. Instead, it has a great potential to undermine this goal. Although the staying power of IBM Corporation is not clear, for now employers need not and, in the interest of confidentiality and efficiency, should not grant an employee’s request for co-worker representation at an interview in an investigation.
Practical Tips for Easier Investigations
Fiercely Protect Confidentiality
Those of you who handle investigations know that a great way to upgrade your practices is to learn from your experience and that of others. Like parenting, there are some guidelines for conducting investigations, but the best teacher is hands-on experience—your own and that of others in similar situations. One important guideline is maintaining confidentiality in investigations. When confidentiality is maintained, the whole process seems easy, or at least easier. Even though IBM Corporation helps in this regard by not forcing employers to allow accused employees to have a co-worker present for the accused employee’s interview, the essence of any investigation is interviewing people—asking them questions and gathering information. The more people involved, the more difficult it becomes to maintain confidentiality.
There are certain steps that an employer should take to attempt to maintain confidentiality. First, the circle of people involved in directing and getting reports on the investigation should be as small as possible. “Need to know” should be interpreted very conservatively, limiting the number of people with knowledge to the fewest possible. Additionally, each and every witness should be told at the beginning and end of each interview that he or she is not to discuss the interview or anything related to the investigation with anyone other than the contact given him or her for providing information or addressing alleged retaliation or other concerns. When I do an investigation, I make sure that I communicate clearly to the witness the importance of confidentiality and the consequences of a breakdown in confidentiality. I explain to the witness that talking about the interview outside the interview room is destructive to the integrity of the process because other witnesses might be influenced by what they hear someone else say instead of giving as spontaneous and unbiased as possible report on what he or she knows. I explain that talking about the investigation may have an adverse effect on the privacy of the individuals involved. My experience is that witnesses will more readily comply with directions if they understand the reason for them.
Even with these precautions, inevitably there are situations in which the witnesses gossip with others after their interviews and tell what was discussed. Employers should act swiftly to deal with these situations as soon as they are aware of them. Suspected violations should be investigated and if found to have occurred, met with corrective action. Failure to do so could lead to claims from an accused whose reputation is damaged by rumors spurred by the investigation. It could also lead to reluctance to bring forward legitimate complaints by employees who fear being the subject of gossip and rumors. Failure to promptly deal with breaches of confidentiality will almost certainly lead to lower productivity, as employees take work time to spread the latest story.
Maintain Privileges that May Apply to Investigations
In discussing confidentiality, it is helpful to review the separate, but related, issue of privilege. The “attorney-client privilege” is a legal evidentiary concept that encourages clients to make full disclosure to their attorneys for the purpose of obtaining competent legal advice and representation. To insure this, clients must be able to make disclosure without fear that it will be revealed to others. The essential elements for the privilege to exist are that legal advice is sought from an attorney, and communications relating to the purpose of obtaining legal advice are made in confidence by the client. A related, but distinct, concept is the “attorney work product doctrine.” This evidentiary doctrine affords attorneys a degree of privacy in their work to encourage them to prepare their cases thoroughly and to investigate not only the favorable, but also the unfavorable aspects of cases. The work product doctrine, which protects materials prepared in anticipation of litigation, prevents taking undue advantage of an adversary's efforts.
How can these concepts aid the investigation process? Does involving an attorney in the process protect information generated in the process? In general, if handled appropriately, an employer can protect information gathered in an investigation unless the investigation is used as an affirmative defense in defending claims against the employer. Since the necessity of using the investigation as an affirmative defense may not be knowable at the outset, the employer will likely want to take precautions that will enable the investigation to be protected, but conduct it so that it is comfortable with asserting the investigation as a defense if necessary.
Most, although not all, investigations will involve some legal claims or potential violation of legal rights. When legal rights are potentially involved, the person requesting the investigation and the investigator should make it clear that the purpose of the inquiry is to investigate a claim that legal rights have been violated or behavior that implicates legal rights. This action will help establish that the investigation output was created in anticipation of litigation. The investigator should be separate from the attorney giving legal advice. This clearly delineates the roles and avoids issues created by the attorney performing dual roles. The non-attorney investigator should conduct the investigation at the direction of counsel and direct all materials to counsel. Materials should be labeled “Confidential and Privileged.” The investigator should confine herself or himself to factual findings and leave advice and recommendations to counsel. Taking these precautions will help preserve the employer’s options in protecting information obtained in an investigation.
Take an Expansive View of the “Workplace”
Of the many difficult issues that can arise in conducting investigations, one of the thorniest is how far the organization’s policy should reach beyond the confines of the physical environment where the organization’s business is usually conducted. To put it another way, how should an organization determine when conduct outside the traditional workplace is covered by the anti-harassment policy? If a manager has a party at his home to celebrate a workplace event, but pays for it himself, is that event subject to the policy? If a manager makes offensive statements to and touches an employee when they have a chance meeting in the mall, is that conduct subject to the policy?
Initially, the organization’s anti-harassment or respect policy should be reviewed to determine if it reaches the behavior in question. Ideally, the policy should be drafted to enable flexibility on the part of the employer in making a determination that the organization’s interests are potentially impacted. Even so, a good rule of thumb is that off-duty conduct is subject to investigation if the conduct is related to the employee’s duties. Thus, if a senior official drinks heavily at social functions in conjunction with business conferences, this behavior is related to the employer’s business since the important business relationships are made and fostered at such social functions. If the conduct is not related to the employer’s business, but affects the employee’s ability to do his or her job, may put the employer in a bad light publicly, or calls into question the employee’s credibility on the job, then the organization should investigate further and take action as appropriate. For example, if a manager makes offensive statements to and touches an employee at a chance meeting in a shopping mall and that manager is a high-ranking officer of the organization, such conduct would at least call into question the employee’s judgment in his job duties.
Conducting effective workplace investigations may never be truly “easy,” but they need not be situations that invoke fear or panic in persons with responsibility for them. Staying up-to-date on legal developments is important. Fortunately, the two recent legal developments discussed in this article remove some obstacles in conducting investigations. Also critically important is maintaining confidentiality. The less said by the fewest individuals about an investigation, the better. Immediately deal with breaches of confidentiality rather than ignore these potential hornet nests. Maintain privileges and protection against discovery of information revealed in an investigation so that they may be asserted if desirable. Finally, employers should not shrink from investigating allegations of misconduct that occur on the periphery of the workplace. These allegations may pose as much, if not more, risk as those more clearly within the boundaries of the workplace. A common sense, flexible approach to defining conduct that should be investigated is the best approach in guarding against claims, bad publicity, and damage to the organization’s reputation.