Top 10 Mistakes When Investigating Misconduct and How to Avoid Them, as appeared in California Employment Law LetterJuly 12, 2010
As you read this, some employee somewhere is engaging in some sort of misconduct. All too often, though, employers needlessly create potential liability in even the most clear-cut cases of misconduct. A botched investigation can turn what could have been a trouble-free termination into a litigation land mine. California law doesn't require proof beyond a reasonable doubt that the employee engaged in the misconduct he is accused of for the employer to defeat a wrongful termination claim. Instead, it requires only that you reached a good-faith determination, based on a good-faith investigation, that the employee engaged in the misconduct. Thus, it is the investigation — not the level of misconduct — that is critical. What follows are the top 10 mistakes employers make in conducting an investigation into suspected employee misconduct and how to avoid them.
(1) Not conducting an investigation at all
There may be multiple reasons to fire an employee for misconduct without conducting an investigation. Perhaps the employee has been accused of the same misconduct many times in the past, and you assume he is guilty. Perhaps you want to use an accusation of misconduct as the "last straw" to get rid of a problem employee. There may be many reasons not to conduct an investigation, but there is no good reason.
(2) Potential bias in the investigation
When thinking of how bias can affect an investigation, most employers think only of how it might affect the complaining party. But employers are also susceptible to claims by employees that they were wrongfully accused of misconduct. Thus, your investigation must be structured to avoid bias against both the victim and the accused. The surest way to avoid bias is to use an independent, neutral third party that specializes in workplace investigations. That's clearly not practical for all employers or all investigations. However, at a minimum, you should ensure that investigations are conducted by an employee who doesn't immediately supervise or have a close working relationship with the complaining party, the accused, or key witnesses.
(3) Not referring to EEOC guidelines
A favorite tactic of employees' attorneys is to attack an employer's investigation by showing how it fell short of the Equal Employment Opportunity Commission's (EEOC) guidelines on how to conduct an effective investigation of unlawful harassment. The guidelines include advice on how to reach credibility determinations, protective measures that should be taken during the investigation, and even specific questions to ask the victim, the accused, and witnesses. The guidance is available on the EEOC's website at www.eeoc.gov/ policy/docs/harassment.html. No employer should initiate an investigation before familiarizing itself with these guidelines.
(4) Inadequate documentation
Every investigation should be documented with the worst-case scenario in mind — that is, with the investigator being cross-examined in front of a jury about every sentence in the investigation report. Reports should be thorough and thoughtfully written. Ideally, witness statements should be signed by the witnesses. Avoid typos and grammatical mistakes. And while most investigations into misconduct come down to a credibility determination, too often there is nothing in the documentation that explains why an investigator believed one person but not another. When offering conclusions about a witness' credibility, the investigator should set forth the objective basis for his determination. For example, the witness' demeanor and motives, the extent of corroboration by other witnesses or evidence, and the past history of similar accusations or conduct should all be documented.
(5) Not interviewing all potential witnesses
An employer not only should ask the complaining employee to identify any witnesses she believes has relevant information, but it should also interview coworkers of the accused. They may be able to provide information about whether they have seen the accused engage in similar conduct. For example, in a sexual harassment investigation, whether coworkers have witnessed the alleged harasser engaging in harassing conduct in the past can have a huge impact on the outcome of the investigation. And make sure to interview all witnesses identified by persons you speak with, including, when possible, former employees.
(6) Not taking appropriate remedial measures during the investigation
Too often, employers focus only on which remedial measures to take after the investigation is complete. But depending on the circumstances, you may need to take temporary remedial measures during the investigation. For example, in a sexual harassment investigation, EEOC guidelines and case law suggest that you separate the complaining employee from the alleged harasser until the investigation is complete. However, that doesn't mean involuntarily transferring or increasing the workload of the complaining employee; that may be seen as retaliation.
(7) Not taking steps to avoid retaliation
Your policies already state that retaliation is unacceptable. However, when investigating a complaint of harassment or whistle-blowing, the investigator should remind the complaining employee, the accused, and everyone else interviewed about the company's prohibition against retaliation and document the admonition.
(8) The 'confidential complaint'
Every employer has probably confronted this problem at least once: An employee complains to a supervisor that a coworker engaged in inappropriate conduct but asks the supervisor to "keep it between us for now." That's usually because the employee fears retaliation. The supervisor should explain to the employee that the employer will do everything possible to keep the matter confidential but that the company faces legal liability if it doesn't investigate every complaint.
Most important, you should assure the employee that company policy prohibits retaliation and that she should immediately report any retaliation to her supervisor or HR. Remember, in California, an employer isn't liable for harassment by a nonsupervisory coworker unless it "knew or should have known" about the harassment and failed to remedy it. Even a "confidential complaint" provides the company with knowledge of potential future harassment.
You may have all the right policies, and your investigation may be thorough. But it's difficult for an employer to argue that it takes harassment complaints seriously if it waits two months to commence an investigation. Instead, investigations should be completed as soon as possible. If there are unavoidable delays, document the reasons for those delays, and once the investigation is complete, inform the concerned parties of the results.
All complaints, even seemingly minor ones, should be investigated thoroughly, and similar incidents should result in similar discipline. One of the most common mistakes employers can make is to protect a high-level executive, top producer, or favored employee who has been accused of harassment or other misconduct. Yet more serious discipline may have been implemented against other employees accused of similar conduct. While the law allows employers fairly wide latitude in determining the appropriate level of discipline, it's critical that like cases are treated alike, regardless of the relative "stature" of the parties involved.
Reprinted with permission of California Employment Law Letter
Copyright 2010 M. Lee Smith Publishers