Quirky Question # 42, Investigation Inquiries

Quirky Question # 42:

This week I’ve decided to take a slightly different approach to my Quirky Question Blog.  I recently presented a Continuing Legal Education seminar on Workplace Investigations, at the end of which I received a number of thoughtful questions from the audience.  Although these questions are not particularly quirky, I thought they were worth addressing.  The following questions will be addressed next Monday.

1)         Is there a time frame you recommend for employers to commence an investigation into workplace misconduct?  Is there a time period by which the investigation should be completed?

2)         If a lawsuit is filed on the morning the investigation is commenced, must that fact be disclosed to the interviewees?  Would this assessment change if the interviewee is named as a defendant?

3)         How do you prevent an interviewee from sharing with other employees the discussion that takes place in an investigative interview?  Would you recommend disciplining a witness who does not maintain the confidentiality of the interview discussion?  Should that person be terminated?

4)         What if an employee surreptitiously records an interview session?  What can be done to retrieve the tape recording?  What consequences can be imposed for this conduct?  If the tape is recovered, can it be destroyed?

5)         How can you evaluate witness credibility if the interviews are being conducted telephonically?

6)         What right does the employee accused of wrongful conduct have to obtain the investigative report?  How about the witnesses who are interviewed?  How about the person making the accusations?

Tune in next week for a discussion of these inquiries.

Dorsey’s Analysis:

1)    Is there a time frame you recommend for employers to commence an investigation into workplace misconduct?  Is there a time period by which the investigation should be completed?

Investigations into suspected workplace misconduct should be initiated promptly.  Beyond that general guideline, however, the speed with which a company should initiate an investigation largely depends on the circumstances and the type of misconduct being investigated.  For example, if the company believes there is a risk of workplace violence, the investigation must be commenced immediately and appropriate precautionary steps must be instituted immediately, even if they are only temporary and await a more complete investigation.  Similarly, if the company believes that employees are trading securities on the basis of inside information, again there are critical reasons to begin your investigation as soon as possible.  There are many other contexts in which a careful and prudent company, which is desirous of minimizing the risk of injury to other employees, the public, or the company, and desirous of reducing the risk of litigation, will take prompt action to investigate allegations of employee wrongdoing.

In a typical investigation into allegations of workplace discrimination and/or sexual or other types of harassment, the company needs to move aggressively, though perhaps not quite as aggressively as it would in the contexts described above.  Even this observation, however, is contextual.  For example, if the sexual harassment investigation involves allegations of inappropriate jokes in the workplace, those allegations would warrant one type of response.  If, alternatively, the sexual harassment allegations related to sexual assault, the investigation must be initiated immediately.  In general, courts have made clear that they expect companies to respond to allegations of harassment and/or discrimination promptly (i.e., within days, not weeks or months).  The longer a company allows serious allegations to remain unexplored, the less receptive the courts will be to the company’s defense and the easier it will be for the plaintiff to argue (perhaps justifiably) that the company was indifferent to the serious problems brought to its attention.  As these examples illustrate, one size does not fit all.  Tailor the nature of the investigation to the types of allegations made.  The timing, scope and the speed of the completion of the investigation will likewise depend on the claims made and the facts uncovered during the investigation itself.

2)    If a lawsuit is filed on the morning the investigation is commenced, must that fact be disclosed to the interviewees?  Would this assessment change if the interviewee is named as a defendant?

This is an interesting inquiry and one I have not personally encountered.  In general, I do not believe the fact that litigation was just instituted needs to be disclosed to the interviewees, subject to the caveat discussed below.  I am not sure, however, what downside would be associated with disclosing that information in most instances.  Indeed, apprising employees that a lawsuit had just been filed that morning might help them better appreciate and understand the stakes involved for the company and make them more cooperative.

As the second observation above reflects, my attitude would change if the company were interviewing the defendant.  In this instance, I believe that the fact of the lawsuit and the employee’s identification in the lawsuit as a defendant should be disclosed to him or her.  (For the purposes of the question, I will assume that the lawsuit was filed by a third-party, not the company itself.  If the company is the plaintiff, a broader set of ethical rules would come into play.)  I am not aware of any legal requirement to disclose the litigation to an interviewee, even one named as a defendant, but I consider that approach fairer and more prudent.  The accused may wish to obtain counsel, the accused may wish to consider more carefully what information he or she discloses voluntarily, and/or the accused may wish to thoughtfully consider all options, including resignation, before participating in an investigation.  All of these potential desires are legitimate and should be respected.  Moreover, if the company were to push ahead with its investigation, without disclosing the fact that the lawsuit had been filed that day, the employee’s lawyer later may be able to exploit that fact.  In my experience, jurors like to see not just a compelling substantive justification for a company’s action, but procedural fairness as well.  Interviewing someone who has been named as a defendant in a lawsuit, without disclosing that fact, does not have the appearance of procedural due process.

Finally, there may be compelling reasons not to proceed with the investigation and the interview of the accused once the lawsuit has commenced.  For example, assume that the named defendant is a member of management who has been accused of sexual harassment.  Assume further, that you interview him without revealing the filing of the lawsuit and that he largely admits wrongful conduct.  Although these admissions may provide the company a basis to discharge him (especially if the allegations are sufficiently serious or he is a repeat offender), you also confront the risk that his status as a member of management will result in his actions being imputed to the company, with attendant corporate liability.  If your investigative report later must be disclosed during discovery, the company may have provided an assist to the plaintiff.  In short, once litigation has begun, I believe that a company should consider carefully just how it wishes to proceed with an investigation into the alleged wrongdoing.  This assessment should include an evaluation of whether an independent investigation is even warranted or whether the “investigation” simply should be performed in the context of the lawsuit itself.

3)    How do you prevent an interviewee from sharing with other employees the discussion that takes place in an investigative interview?  Would you recommend disciplining a witness who does not maintain the confidentiality of the interview discussion?  Should that person be terminated?

Individuals being interviewed in connection with a company investigation should be advised at the outset of the interview that the company is engaged in a confidential investigation and the company’s expectation is that the contents of the interview, both questions and answers, will remain confidential.  It also is appropriate to inform employees that if they reveal information disclosed in an interview (either questions or answers) to other employees or anyone outside the company, including family members, the employee will be subject to discipline, up to and including discharge.

In my view, it would be appropriate to discipline someone who disregarded that directive.  The level of the discipline, and the difficult question of whether the employee should be terminated for revealing the contents of the interview, again (like Question # 1 above) is highly dependent on the nature of the investigation.  For example, if the company is investigating insider trading and the interviewee tips off the employee accused of this illegal conduct, the interviewee should be terminated.  If, however, the alleged offense is far less severe, discharge may be a completely disproportional response to the revelation (intentional or inadvertent) of some aspect of the investigative interview.

Before terminating an individual who has participated in an investigation, you also should consult with in-house or outside counsel.  The key issue you will want to consider in this context is whether the termination could be characterized as retaliatory.  This issue currently is before the U.S. Supreme Court and will be the subject of a future Blog.

4)    What if an employee surreptitiously records an interview session?  What can be done to retrieve the tape recording?  What consequences can be imposed for this conduct?  If the tape is recovered, can it be destroyed?

The question presumes that at some point after the interview, the company learns that someone has secretly recorded the interview session.  Clearly, you want to obtain all copies of the tape.  It could be passed along to other interviewees or individuals outside the company.  Moreover, in our digital age, you could discover the audio tape had made its way to the Internet or a website.  Given these risks, I recommend that the company immediately try to retrieve all copies of the audio tape.  Further, you could advise an employee who refused to return it that he/she will be subject to discipline, up to and including termination.  (Again, however, this admonition should be considered carefully with counsel to ensure that the company is not increasing the likelihood of future litigation.)

You also ask whether the company can destroy the tape.  This is a more difficult question, and implicates some facts that are not addressed in your inquiry.  For example, has a lawsuit been instituted?  Is it likely that a lawsuit will be instituted?  In either of these contexts, the prudent course of conduct is to preserve this evidence carefully.  You do not want to expose the company to a risk that it will be accused of spoliation of evidence (essentially, a claim that the company destroyed inculpatory evidence).  Even in the absence of a lawsuit, or the likelihood of a lawsuit, the more conservative approach is to retain the tape.  By doing so, you will avoid the risk that you are later accused of destroying evidence that either was damaging to the company or in some way beneficial to the interviewee.

5)    How can you evaluate witness credibility if the interviews are being conducted telephonically?
As recognized by your question, it is difficult to assess witness credibility in a telephonic interview.  Therefore, I recommend that, for interviews where you have a reasonable basis to believe that witness credibility will be an important factor in your assessment, you not conduct the interviews over the telephone.  If you have to conduct telephonic interviews, you will have to base your credibility assessments on issues such as consistency with other testimonial and documentary evidence.

6)    What right does the employee accused of wrongful conduct have to obtain the investigative report?  How about the witnesses who are interviewed?  How about the person making the accusations?

The employee accused of wrongful conduct has no right to obtain or even review the investigative report.  The same holds true for the witnesses you interview.  A similar observation applies to the person who made the accusations.  You do not have to provide the investigative report to any of these individuals.  I strongly recommend that you not do so.

Of course, if litigation is commenced, either by the person making the accusations, or (in that unusual context) the accused, the calculus above changes.  Depending on who prepared the report, it may or may not be protected by the attorney-client privilege or the work-product doctrine.  If a lawyer did not prepare the report, or the report was not prepared at the direction of counsel, in all likelihood you are going to have to produce the report during the discovery phase of the lawsuit.  That does not mean, however, that it must be provided to the accused or to the witnesses – just the person who has filed the lawsuit.  Moreover, you should make an effort to protect further dissemination of the report through the use of an appropriate Protective Order.

Even if a lawyer prepared your report, or directed the preparation of the report, if you intend to rely on the report and the analysis set forth therein to justify your decisions or to demonstrate that the company provided procedural due process to the accused, you may find that the report must be disclosed in response to discovery requests.  That potential illustrates the importance of considering a number of related issues in advance: a) who should prepare the report; b) what should the scope of the report be; c) to whom will the report be provided within the company; d) will the company rely on the report for the decision regarding the accused; and e) will the company look at external factors, beyond the scope of the report, as well.  These and other factors will be addressed in future Blog questions.

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