How to Create Bulletproof Documentation in Employee Investigations

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September 21, 2018
Author: Jeff Weintraub
Organization: Fisher & Phillips LLP

Why A Proper Investigation Is So Important
More than ever before, employers are finding it necessary to conduct internal investigations. This is not because today’s employers are more curious than their predecessors; it’s because good investigations can reduce inefficiency, detect wrongdoing, and save money. More pointedly, in a society where so many people seem to be looking for a lawsuit to provide them a bountiful living, competent, well-done investigations can avoid lawsuits, or at least help in defending against them. Of course, the benefits to be derived are only as good as the underlying investigations, and a poorly conceived or ineptly executed investigation can be more of a liability than a benefit. In short, when employers undertake investigations, they had better be done well.

The most common scenarios leading to internal investigations probably involve misconduct, such as theft or suspected violation of some company policy, and employee complaints, such as those alleging violation of some law, e.g., harassment or discrimination. These scenarios arise in a variety of ways, including through internal audits, circumstantial evidence of wrongdoing noticed by managers or employees, and outright complaints by employees and customers. Regardless of how they arise, they must be evaluated carefully and taken seriously. Failure to do so can cause great harm to the employer, as well as to individual employees and managers. Employers, and even individual managers and employees, may be liable for misconduct and wrongdoing, not just for what they actually know, but even in some cases, e.g., harassment, for what they did not know but “should have known.”

A. The New Trend of Outsourcing Investigation – Money Well Spent
Generally, a thorough investigation requires one central person to coordinate and analyze all the information generated. When possible, this person should not be the employee’s direct supervisor, because the supervisor is often directly affected and/or emotionally involved in the employee’s misconduct. Having someone from outside the department will help ensure objectivity throughout the investigation and can also help ensure a more consistent application of the company’s disciplinary policy. A critical element in any investigation is who performs the investigation itself.

Potential investigators may include a member of Human Resources, a member of management, an outside investigator, or in-house or outside counsel. The investigator should have the following characteristics:
1. Unbiased And Neutral
The investigator should not favor one party over the other, and should not have a personal interest in the outcome of the investigation.
2. Experienced In The Area
The investigator should have a thorough knowledge of company policies and procedure and should also have good interviewing skills, and an ability to accurately record witness interviews.
3. Good Rapport
Should be someone that both the accuser and accused, as well as the potential witnesses, will be comfortable with.
4. Ability To Maintain Confidentiality
Confidentiality is critical to the investigation because it helps to ensure that the information gathered is truthful and accurate and to preserve the attorney-client and work product privileges. It is equally important in order to protect the privacy interests of the investigation participants, and to prevent statements being made about them that could spawn subsequent defamation lawsuits against the company. However, there today are some limitations as to requiring confidentiality, pursuant to the Labor Act.
5. Credible
The investigator must have a credible and trustworthy background. Also must be someone who will make a good witness in future legal proceedings, e.g., deposition or at trial.

Sometimes, using outside counsel to perform serious investigations makes sense; however, there is a risk in using outside attorneys to actually conduct in investigations, since the investigation is your defense in a later harassment lawsuit, which probably means waiving the attorney-client privilege in order to use the investigation as your defense!

B. Tips for Proper Investigations
The investigator should begin by planning the investigation. The investigator should examine the policy(s) that were violation and what the company’s obligation is, if any, and should also find out how prior instances of similar misconduct have been addressed by the company. In addition, he or she should determine who should be interviewed and determined the order in which the interviews will occur. Once the investigation has been properly planned, the investigator should document his/her discussion with the supervisor or other person who reported the suspected misconduct. Witnesses' names, times, dates, items taken, etc., should be noted in the initial documentation. The investigator should then investigate the incident by talking to witnesses who observed or who may have observed the misconduct. Each witness should be advised that the matter being discussed is confidential. If the witness is an employee, he should be advised that the failure to keep the matter confidential may result in serious disciplinary action up to and including discharge. The investigator should take notes during the meeting and ask the witness if he or she would be willing to sign a written statement regarding the incident. The statement can be prepared by the HRM if the witness consents. The witness may also write out a handwritten statement. If a handwritten statement is provided, it should be consistent with the notes taken by the investigator to protect the integrity of the investigation. Handwritten statements have the advantage of being in the witness's \"own words.\" Each witness should be advised up front that giving a statement is voluntary and this should be noted in the body of the statement.

The investigator must try to assess the credibility of the person giving the statement. If the witness is not credible, any resulting decision based upon his statement may be open to attack. Where the alleged employee misconduct is based solely on the testimony of co-workers, the investigator should determine whether the witnesses harbor animus against accused employee or have some reason for fabricating a charge of misconduct. In most cases, any person who may be a witness to an incident is fair game and may be approached by the former employee’s attorney. The investigator should also review any documentation that may bear on the misconduct such as time records, production reports, surveillance cameras, etc. Once the investigator has interviewed witnesses to the misconduct and reviewed any relevant documents, he or she should interview the accused employee, provided that the information obtained supports a finding that the accused employee is guilty of misconduct. The investigator should always have another management official present when the accused employee is interviewed. The accused employee should be questioned about the alleged misconduct and his version should be documented. Some employers tape record interviews when they have a reasonable belief that the employee will be untruthful.1 The investigator should also be aware of possible tape recording by the accused employee. A rule of thumb in conducting interviews with accused employees is to never say anything that you would not want to see on the front page of the newspaper. As with the other witnesses, the interview with the accused employee should be documented. If the employee denies the misconduct, then he should be asked to provide witnesses or documents that support his denial. Each person that the employee identifies should be interviewed and statements obtained. Once the interview process is completed, the investigation should provide a written memorandum outlining the steps taken in the investigation, the information obtained, and the recommended discipline.

C. Reasons to Investigate
In today’s litigious environment, internal investigations of alleged misconduct are critical - these investigations can last days, weeks or even months depending on the severity of the allegations. A good investigation can mean the difference between an employer winning and losing a case, especially in cases involving sexual or racial harassment. In other cases, such as wrongful termination or discrimination, most courts and juries expect that the employer will conduct a good-faith investigation and come to a reasonable conclusion before a discipline or termination decision is reached. For these reasons it is good practice to always investigate all moderate to severe infractions. For minor violations, or infractions that would only result in a verbal warning, an investigation may not be required – although a sound basis for even the most minor discipline must be always be established.

1. Laws requiring investigations
a. Job discrimination laws - Title VII, ADA, ADEA, state laws, etc.
b. Health and safety laws - OSHA.
c. Drug-free workplace laws - Drug-Free Workplace Act of 1988; DOT regulations.
i. Whether we like it or not, drugs and mind-altering substances of all varieties are part of our society. Their impact on individuals and companies is profound and ongoing. In recognition and response to substance abuse throughout the country and its accompanying effect on the American workplace, many employers have implemented substance abuse programs in their operations.
ii. Industry consultants claim that 15 percent of American employees abuse substances and 65 percent of workplace accidents are linked to substance abuse. Years of experience have led employers to become cognizant that drug testing can help combat employee theft, loss of productivity, excessive absenteeism, excessive health costs, rising workers' compensation premiums, tardiness, on-the-job accidents, and exposure to lawsuits by individuals injured by an impaired employee.
2. Background and credit checks
a. Avoidance of liability for negligent hiring
b. Avoidance of liability for negligent retention
3. Attitude problems
4. Threats against others
5. Vandalism and other sabotage
6. Violations of work rules
7. Workplace theft

D. Equal Employment Opportunity Guidelines (the following is information published by EEOC)
“The Charge Handling Process
When a charge is filed against you, you will be notified within 10 days that a charge of discrimination has been filed and you will be provided with the name and contact information for the investigator assigned to your case. A charge does not constitute a finding that your company engaged in discrimination. The EEOC has a responsibility to investigate and determine whether there is a reasonable cause to believe discrimination occurred.

In many cases, you may opt to resolve a charge early in the process through mediation or settlement. At the start of an investigation, EEOC will advise you if your charge is eligible for mediation, but feel free to ask the investigator about the settlement option. Mediation and settlement are voluntary resolutions.

During the investigation, you and the Charging Party will be asked to provide information. Your investigator will evaluate the information submitted to determine whether unlawful discrimination has taken place. You may be asked to:
• submit a statement of position. This is your opportunity to tell your side of the story and you should take advantage of it.
• respond to a Request for Information (RFI). The RFI may ask you to submit copies of personnel policies, Charging Party's personnel files, the personnel files of other individuals and other relevant information.
• permit an on-site visit. While you may view such a visit as being disruptive to your operations, our experience has been that such visits greatly expedite the fact- finding process and may help achieve quicker resolutions. In some cases, an on- site visit may be an alternative to a RFI if requested documents are made available for viewing or photocopying.
• provide contact information for or have employees available for witness interviews. You may be present during interviews with management personnel, but an investigator is allowed to conduct interviews of non-management level employees without your presence or permission.

If the charge was not dismissed by the EEOC when it was received, that means there was some basis for proceeding with further investigation. There are many cases where it is unclear whether discrimination may have occurred and an investigation is necessary. You are encouraged to present any facts that you believe show the allegations are incorrect or do not amount to a violation of the law. An employer's input and cooperation will assist EEOC in promptly and thoroughly investigating a charge. • Work with the investigator to identify the most efficient and least burdensome way to gather relevant evidence.
• You should submit a prompt response to the EEOC and provide the information requested, even if you believe the charge is frivolous.
• If there are extenuating circumstances preventing a timely response from you, contact your investigator to work out a new due date for the information.
• Provide complete and accurate information in response to requests from your investigator.
• The average time it takes to process an EEOC investigation is about 182 days.
• Our experience shows that undue delay in responding to requests for information extends the time it takes to complete an investigation.
• If you have concerns regarding the scope of the information being sought, advise the investigator. Although EEOC is entitled to all information relevant to the allegations contained in the charge, and has the authority to subpoena such information, in some instances, the information request may be modified.
• Keep relevant documents. If you are unsure whether a document is needed, ask your investigator. By law, you are required to keep certain documents for a set period of time.
Your investigator will:
• be available to answer most questions you have about the process.
• keep you informed about the charge process, including the rights and responsibilities of the parties at the conclusion of the investigation.
• conduct an appropriate, thorough and timely investigation.
• allow you to respond to the allegations.
• inform you of the outcome of the investigation.
• Once the investigator has completed the investigation, EEOC will make a determination on the merits of the charge.

If EEOC determines that there is no reasonable cause to believe that discrimination occurred, the charging party will be issued a letter called a Dismissal and Notice of Rights that tells the charging party s/he has the right to file a lawsuit in federal court within 90 days from the date of receipt of the letter. The employer will also receive a copy of this document.

If EEOC determines there is reasonable cause to believe discrimination has occurred, both parties will be issued a Letter of Determination stating that there is reason to believe that discrimination occurred and inviting the parties to join the agency in seeking to resolve the charge, through an informal process known as conciliation. Where conciliation fails, EEOC has the authority to enforce violations of its statutes by filing a lawsuit in federal court. If the EEOC decides not to litigate, the charging party will receive a Notice of Right to Sue and may file a lawsuit in federal court within 90 days.”

From: EEOC’s Charge Handling Process at (Last Visited: July 14, 2014).

E. Always be Aware of What Will Be Discoverable from the Investigation
The attorney-client privilege protects communications that a client makes in confidence to its inside or outside counsel for the purpose of obtaining legal advice. The attorney work product privilege protects the thoughts and impressions of an attorney generated during the course of the attorney’s legal duties and in anticipation of litigation. Confidentiality of an investigation is highly important because these privileges may be lost if the company waives the privilege by disclosing the information to others. Protection by these privileges over the adequacy of the investigation may also be lost if the employer decides to disclose its investigation to establish the Ellerth/Faragher affirmative defense or to establish that it had good cause to terminate an employee. However, the legal advice provided during and after the investigation may still be protected. To help ensure that the privilege will apply to the attorney-client communications and legal advice, the employer should do the following:
• document in writing that counsel has been consulted regarding the complaint or suspected wrongdoing prior to the investigation and that counsel is providing legal advice to the employer regarding the investigation;
• mark documents prepared during the investigation as “prepared in anticipation of litigation”;
• mark documents that contain or reflect communications with counsel as “attorney-client privileged” and “attorney work product” and keep these documents in a file labeled “Investigation File: Privileged Information,” separate from the regular “Investigation File” which contains materials and documents the investigator obtains and creates throughout the investigation;
• allow only the individuals with a legitimate need to know the investigatory information to communicate with counsel. And only allow those with a legitimate need to know the information to view the documents marked as privileged.

F. What to Do With the Evidence to Resolve the Issue
1. Conclude the Investigation
a. Carefully analyze the information obtained and draw reasoned and logical conclusions.
b. Be critical.
c. Keep an open mind.
d. Determine whether the evidence is sufficient to establish in good faith that the conduct alleged occurred and/or an internal policy was violated.

2. Prepare the Investigative Report
Include in the investigative report:
a. Summary of the allegations.
b. Remedy requested.
c. Summary of relevant policy, procedures, rules, or instructions.
d. Summary of witness interviews.
e. Description of relevant documents.
f. Chronology of events.
g. Statement of findings of fact (allegation by allegation).
h. Statement of conclusions drawn from the allegations (if requested).
i. Discussion of recommendations for actions to be taken (if requested).

3. Prepare the Investigative File
a. Complaint
b. Log of investigator's actions, including dates
c. Witness statements and/or witness interview notes
d. Cassette tapes and copies of transcripts
e. Documents related to the complaint and other relevant physical evidence
f. Investigative report
g. Documents regarding follow-up meetings with the complainant and the respondent, (training provided as part of corrective action, etc.)

4. Submit the Investigative Report to the Appropriate Individuals
a. \"Need to know\"
a. Your direct supervisor
b. Director of human resources/personnel
c. In-house counsel

G. After the Investigation is Completed
1. Do not discuss any information obtained during the investigation, except on a \"need-toknow\" basis.
a. Follow-up with complainant,
b. Provide target with summary.
2. Do not take action against an employee if the results of the investigation are not clear. Consider investigating further or issuing a cautionary warning reminding the employee of the applicable company policy.
3. Maintain confidentiality in future.
4. After the final report has been prepared, destroy the earlier drafts of the report, as long as no attorney demand letter or lawsuits have been received on the subject. The rationale for their destruction is to eliminate any sources of conflict with the final draft; discrepancies between earlier drafts and the final report could be viewed with suspicion and accentuated in court in order to undermine the final report. Retain all investigative notes, in handwritten and electronic form.
5. Monitor situation to prevent reoccurrence and/or retaliation
6. Re-open investigation if you later learn relevant facts
7. Training needed?
8. Do not think about suing the employee who engaged in misconduct unless you are certain that the employee has violated the law (e.g., theft of company property, etc.) and you are prepared to prove that fact beyond a reasonable doubt.

H. Documenting The Investigation
1. Review the Applicable Documents
a. Determine the relevancy of documents.
b. Determine if documents are \"missing\" (e.g., a letter without a response).
c. Determine who prepared the documents and why.
2. Potential Documents to Review
a. Written complaint
b. Policies, procedures, instructions
c. Prior relevant investigation files
d. Prior relevant complaints
e. Personnel files of the individuals involved
f. Collective bargaining agreements
g. Other relevant business records

1 Employers must proceed cautiously, since tape recording an interview, if not routinely done, can be viewed as a \"set-up.\" Employers, if they choose to record the interview, must be ready to support their reasons for doing so.

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