Practical Pointers for Workplace Investigations

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August 20, 2018
Author: Marie-Joelle C. Khouzam
Organization: Carlile Patchen & Murphy LLP

The Importance of Training
According to Equal Employment Opportunity Commission statistics, from 1997 to 2013 employees filed 93,727 discrimination charges against their employers, with monetary damages and settlements for the 15-year period exceeding $1.4 billion. See In light of these statistics, employers must take affirmative steps to decrease or avoid liability for claims of violating anti-discrimination laws. Management training, particularly for managers and supervisors, is one way to accomplish this goal. Such training should become the rule, not the exception. Training should include education on laws regarding:

  • sexual harassment,
  • racial discrimination,
  • affirmative action
  • equal employment opportunities

In some states, training is now legally required. In all states, it is essential to establishing certain affirmative defenses against discrimination or harassment claims, including defenses from claims for punitive damages.

Along with preservation of financial assets, another positive benefit of decreased claims exposure is increased employee morale when employers take an active interest in maintaining a “clean” workplace. The tangible byproduct: reduced turnover, increased retention.

Declining productivity [ ] inevitably results from poor employment practices and workplace disputes . . . Deficient employment practices often foster absenteeism, low morale, dismal attitudes, poor performance, turnover, and, worse still, deterioration of the employer’s public image and status in the community. [These are] costs that can only be cured through a deliberate employment practices wellness program that includes healthy investments in training.

W. Kirk Turner, Christopher S. Thrutchley, Employment Law and Practices Training: No
Longer The Exception- It’s The Rule, SHRM Legal Report, July-August 2002, In 1998, the Supreme Court of the United States made management’s understanding of harassment policies a front-burner issuer in a pair of cases that remain very relevant today. In Faragher v. City of Boca Raton, 524 U.S. 775, 118 S. Ct. 2275 and Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 118 S. Ct. 2257, the Court focused on who was liable for sexual harassment and under what circumstances. In both cases, the Court found that the respective employers had, despite having non-harassment policies, deprived themselves of their best defense by not properly disseminating or explaining their policies. Faragher, supra, at 762; Ellerth, supra, at 809. More recently, in EEOC v. Smokin’ Joe’s Tobacco Shop, Inc., No. 06-01758, 2007 U.S. Dist. LEXIS 62047 (E.D. Pa. Aug. 23, 2007), that court found that the employee designated to investigate the plaintiff’s complaint had no special training on how to conduct a sexual harassment investigation. In fact, his lack of understanding about the process resulted in him divulging sensitive information that would ordinarily be kept confidential outside the workplace, and ultimately determining that the employee should be discharged on the grounds that she was uncooperative in the investigation! In the underlying administrative case, the employer was required, as part of a consent decree with the EEOC, to enter into an agreement that included a requirement to provide training. At the trial court stage, the company was prohibited from raising a critical defense to avoid liability.

Several states have enacted legislation making employment law training for employees a requirement, or at least a codified suggestion:

The California Department of Fair Employment and Housing requires every employer to implement certain minimum requirements to “ensure a workplace free of sexual harassment.” Cal. Gov. Code § 12950(b). This includes distributing a poster and information sheet on sexual harassment on topics such as the illegality of sexual harassment, the definition of sexual harassment under applicable laws, the complaint process, and remedies. See also California Law AB 1825: employers with 50 or more employees, including temps and contractors, must provide supervisory employees with two hours of sexual harassment prevention training every two years. Detailed list of trainer requirements.

Colorado explicitly encourages all persons to take steps necessary to prevent sexual harassment from occurring. This includes affirmatively raising the subject, informing employees of their right to raise the issue of harassment and developing methods to “sensitize” all concerned. Colo. Code Regs. § 708-1, Rule 80.11(C).

Employers with 50 or more employees must provide two hours of training and education to all supervisory employees and to all new supervisory employees within six months of assuming the supervisory position. The training and education includes learning the state and federal statutory provisions concerning sexual harassment. Conn. Gen. Stat. § 46a-54(15).

All supervisory personnel of executive agencies must receive training in the principles of equal employment opportunity and affirmative action. Fla. Admin. Code, tit. 60L, § 21.004.

Applicable Administrative Rules state that \"prevention is the best tool for the elimination of sexual harassment. Employers should affirmatively raise the subject, express strong disapproval, develop appropriate sanctions, inform employees of their right to raise and how to raise the issue of sexual harassment, and take any other steps necessary to prevent sexual harassment from occurring.\" The state Civil Rights Commission states that such programs should include training of supervisory employees about their responsibilities, and training of all employees about sexual harassment policies and grievance procedures.

All state agencies and executive boards and commissions are required to establish, maintain and carry out a continuing sexual harassment program that must include training as a component of all ongoing or new employee training programs. Ill. Comp. Stat., Chap. 775, § 2-105(B)(5).

Management and supervisory employees of the Executive branch are required to attend training covering affirmative action, cultural diversity, and discriminatory harassment prevention.

Workplaces with 15 or more employees must, within one year of commencement of employment, conduct education and training programs of new employees. Me. Rev. Stat. § 807(3).

The Maryland Commission on Human Relations favorably considers preventative steps taken by an employer, including training, when reviewing a harassment charge.

The General Laws of Massachusetts encourage employers to conduct an education and training program for new employees within one year of commencement of employment, as well as for new supervisory and managerial employees. Mass. Gen. Laws, Chap. 151B, § 3A.

Michigan’s Department of Civil Rights “shall offer education and training programs to employers, labor organizations, and employment agencies” in order to facilitate understanding of the Persons with Disabilities Civil Rights Act. Mich. Comp. Laws Ann., § 37.1212.

Nevada encourages private employers to take steps necessary to prevent sexual harassment from occurring, and requires state employees to take a certified class on sexual harassment within six months of their appointment, and every two years thereafter.

New Jersey
Although not statutorily mandated, the New Jersey Supreme Court held that if an employer wishes to take advantage of applicable defenses, it must have and publicize an anti-harassment policy, have a mandatory harassment training policy, and monitor to ensure that the policy is effective. Gaines v. Bellino, 173 N.J. 301 (2002).

New Mexico
Primary and secondary schools must provide sexual harassment education to all licensed school personnel at least annually.

North Carolina
State agencies must develop a \"plan on unlawful workplace harassment,\" which includes training for state employees.

O.A.C. 4112-5-05(J)(6): \"Prevention is the best tool for the elimination of sexual harassment. An employer should take all steps necessary to prevent sexual harassment from occurring, such as affirmatively raising the subject, expressing strong disapproval, developing appropriate sanctions, informing employees of their right to raise and how to raise the issue of harassment under Chapter 4112 of the Revised Code and developing methods to sensitize all concerned.\"

Any person who investigates complaints of employment discrimination in executive branch agencies must receive training that includes four (4) days of initial discrimination complaints investigator training, a minimum of one (1) investigation under the guidance of a senior EEO investigator, and a minimum of six (6) hours classroom instruction or 6.0 CEUs in related training. Okla. Stat. tit. 530 § 10-3-22.

Commonwealth employees must be educated in sexual harassment, which can be done via orientation sessions, videos, formal training, discussions, written materials, and individual counseling.

Rhode Island
Employers are encouraged to conduct an education and training program for all new employees within one (1) year of the commencement of employment and additional training for all supervisory employees. R.I. Gen. Laws Chap. 118 § 28-51-2.

Each department and entity of state government must plan and conduct training workshops to prevent sexual harassment from occurring. Tenn. Code § 4-3-1703.

Employees must attend an employment discrimination training program no later than 30 days after the commencement of employment, and to sign a statement verifying attendance at the program. Tex. Lab. Code § 21.010.

All public employers must provide sexual harassment training consistent with the Department of Human Resource Management. Utah Admin. Code § 477-25-7.

All employers and labor organizations are encouraged to conduct an education and training program for all current employees and members. All new supervisory employees should be informed on the methods to be taken to ensure immediate and appropriate corrective action. Vt. Stat. § 495h.

Washington has an Executive Order requiring state agencies to conduct training and education.

Employers must \"provide training to sensitize employees on the issue of harassment and periodically remind them of your strong desire to maintain a harassment free workplace.\"

In addition, the EEOC has adopted guidelines that encourage employers to train their employees. EEOC Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors (June 18, 1999).

Managers are your first line of defense. Employers should provide employment law training so they can timely learn of and deal with complaints. This also preserves the employer’s ability to establish an affirmative defense against discrimination claims, in the event a complaint goes beyond the internal complaint stage.

In Faragher, the Court stated that where no tangible adverse employment action is taken, an employer may establish an affirmative defense to liability or damages by showing that:

  • the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and
  • the plaintiff employee unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise.

Faragher, 524 U.S. 775, 808 (1998). Subsequently, lower courts have found that where an employer has an antidiscrimination policy and the employer effectively trains its employees on preventing discrimination, an affirmative defense can be raised. Wyatt v. Hunt Plywood, 297 F.2d 405, 407 (5th Cir. 2002); Walton v. Johnson & Johnson Servs., 203 F. Supp. 2d 1312 (M.D. Fla. 2002).

By contrast, employers who failed to train – or train effectively - were denied the affirmative defense. In Clark v. United Parcel Service, Inc., 400 F.3d 341 (6th Cir. 2004), the Sixth Circuit held that simply instituting a sexual harassment policy is insufficient for an employer to meet the first prong of the Faragher/Ellerth defense. The Court noted that an effective sexual harassment policy should at least (1) require supervisors to report incidents of sexual harassment, (2) permit both informal and formal complaints of harassment to be made, (3) provide a mechanism for bypassing a harassing supervisor when making a complaint, and (4) provide for training regarding the policy. The Court did not address how frequently employers should conduct training or who should be trained. See also Elmasry v. Veith, 2000 U.S. Dist. LEXIS 340 (D.N.H. Jan. 7, 2000); Williams v. Spartan Communications, Inc., 2000 U.S. App. LEXIS 5776, at *6 (4th Cir. Mar. 30, 2000), Gordon v. Southern Bells, Inc., 67 F. Supp. 2d 966, 982-83 (D. Ind. 1999).

Courts have also held that employers also fail to establish an affirmative defense where employment law training is provided for the employees but the training is not effective Munroe v. Compaq Computer Corp., 2002 U.S. Dist. LEXIS 20821 (D.N.H. 2002); Bishop v. Woodbury Clinical Laboratory, Inc. ., No. 3:08-1032 (M.D. Tenn. 2010) (court barred employer from raising affirmative defenses where there was no evidence that employer conducted training about company’s policy or reporting obligations, and failed to demonstrate it took reasonable care to prevent or correct harassment).

The second level of inquiry is how much knowledge should trigger an investigation. The legal standard is “knew or should have known of but failed to remedy”. It is not “I wasn’t sure, so I didn’t think I should investigate.” To complicate matters, the digital era now raises the bar for employers in terms of what information becomes known to them, and how they respond to such information. Managers and supervisors to be the eyes and ears of the company; however, understanding what and why they are watching for issues is critical. Empathy goes a long way in making a policy a living thing, rather than just words on a page. Management must be taught to avoid making judgments or jumping to conclusions about an individual’s credibility or likelihood to be believed. Often, it helps to understand that harassment may be occurring but not being reported to you. Why are people afraid to speak out? Fear of:

  • retaliation (loss of job or job opportunities)
  • rejection by co-workers
  • being labeled a \"trouble-maker\"
  • not being considered a \"team player\"
  • being accused of not having a \"sense of humor\"
  • being the subject of the rumor mill
  • being labeled \"over-sensitive\"
  • not being believed

Nowhere is the saying “Penny wise, pound foolish” more true than in the costs associated with your company’s most important resource, your human resource.

Highest reported verdicts:

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  • Weeks v. Baker & McKenzie (1994) - $7.1MM, reduced to $3.5MM
  • Ingraham v. UBS (2011) - $10.6 MM
  • Sanders v. NY Knicks and Isaiah Thomas (2007) – $11.7MM
  • Gilbert v. Chrysler (1999) - $21MM; dismissed in 2004
  • Ralph’s Grocery (2002) – 6 plaintiffs, $30MM; reduced in 2006
  • Alford v. Aaron’s Rentals (2011) - $95MM, reduced to $40MM due to cap
  • Chopurian v. Mercy Hospital (2012) - $168MM
  • Novartis Pharmaceuticals (2010) - $250MM

EEOC suits:

  • Babies R Us was ordered to pay $205,000 and required to implement training due to same-sex harassment of a male employee.
  • Texaco settled a $170 million suit in which executives referred to minorities as various colors of “jellybeans”, and had to spend considerable resources to train its workforces.\\
  • Mitsubishi settled an EEOC case for $34 million, conditioned upon extensive training.
  • $1.5 million verdict in harassment and retaliation case involving temporary employees of New Breed Logistics

Under Ohio law, individual managers and supervisors can be held individually liable. Are you compromising your family’s well-being at risk by becoming a defendant in a lawsuit, even one that does not have merit?

Quid Pro Quo

  • Harasser is always liable AND Employer is always liable

Hostile Environment

  • Harasser is always liable
  • Employer is liable for harassment by owner/high level manager
  • Employer is liable for harassment by supervisor, co-worker, or non-employee
  • if: (1) employer knew or had reason to know of conduct; and (2) failed to take prompt, remedial action

No or limited liability for unknown harassment, if employer:

  • Has policy against harassment
  • Has proper complaint procedure
  • Communicated policy, procedure and disapproval of harassment to employees

In dollars and cents, compare the cost of training to the cost of litigation, even in the case that is ultimately a victory for the employer.

Additionally, training may be an important component to staving off claims for punitive damages. In Kolstad v. American Dental Ass’n, 527 U.S. 526 (1999), the Supreme Court effectively created a defense that is available only when an employer can show it made good-faith efforts to implement an anti-discrimination policy, including training management. In such instances, the employer may have to defend claims for compensatory or other damages, but will not be exposed to claims for punitive damages. But see Bruso v. United Airlines, Inc., 239 F.3d 848, 858-59 (7th Cir. 2001) (existence of a policy alone is insufficient to insulate employer from liability for punitive damages award). See also EEOC v. Wal-Mart, 187 F.3d 1241 (10th Cir. 1999) (“Wal-
Mart … had a written policy against discrimination, but… [we are] unconvinced that Wal-
Mart made a good-faith effort to educate employees about the ADA’s prohibitions.”). And in EEOC v. Management Hospitality of Racine, Inc., 666 F.3d 422 (7th Cir. 2012), the court determined that canned training such as requiring employees to watch a generic videotape does not qualify for the Kolstad good-faith effort defense. The jury awarded $5,000 in compensatory damages and $100,000 in punitive damages. In similarly reasoned cases, a trial court awarded a $5MM punitive damages award for the company’s failure to train on harassment, which was eventually reduced by the appellate court (Bains v. ARCO Prods. Co., 405 F. 3d 764, (9th Cir. 2005)) and a $1MM punitive-damages award for failure to train managers (Swinton v. Potomac Corporation, 270 F. 3d 794 (9th Cir. 2001).

The cost of harassment includes not only the cost of defense and a possible verdict (or settlement) for the plaintiff, but also the time that management shifts focus away from work and on litigation, and the financial impact on other projects or resources (i.e., better benefits, new equipment, or other ways of improving the workplace). How much training is enough? Training should include a review of what the program should consist of, who will be trained, how frequently, etc. Other key components to plan for:

  • Issue a carefully phrased and enforceable policy (“zero-tolerance”?)
  • Include it in your handbook; consider whether other posting is beneficial
  • Update your manual periodically, and don’t skip over this policy
  • Develop or update your social media policy, or related policies
  • Use and retain signed acknowledgements of receipt
  • Go over the policy with new hires
  • Conduct customized training that includes interactive exercises; repeat training periodically
  • Consider using an outside trainer, and making sessions available to all employees across shifts and locations
  • Conduct separate management training; repeat periodically
  • Discuss these issues regularly, not just in a formal scheduled training session
  • Maintain an attendance log of attendees
  • Leave time for Q&A
  • Monitor departments or engage supervisors/managers in discussions to ferret out issues
  • Plan for new supervisor orientation
  • Conduct diversity training
  • Consider periodic reissuance of the policy, such as with paychecks (link to site?)

While some employers rely on EPLI to offset the cost of paying for discrimination or harassment claims, the cost of these products and possibility of being dropped for claims history should be considered, as should the fact that underwriters may require training as a per-requisite or a component to obtaining coverage. Fortunately, technology has made training employees a more affordable and convenient proposition, through options like online learning modules

Employee morale is increased and turnover is decreased where employees work in a non-hostile, friendly environment. Employee morale and turnover is directly affected if employees’ discrimination concerns are not properly handled by the employer and the supervisory employees.

Productivity can is also increased by nurturing a positive environment that is fostered where there is prompt and efficient resolution of discriminatory behaviors and practices. Intangibles resulting from adverse claims can include loss of reputation, bad publicity to all involved, distrust, a rigid workplace, and increased absenteeism.

In 2002, Coca-Cola came under fire following the $192.5 million settlement of a class action discrimination suit, but after implementing mandatory training, its diversity efforts now serve as a model. Coca-Cola Gets Good Grades, Daily Labor Reporter (BNA) A-5 (Sept. 27, 2002).

A note of caution: Productive department heads or successful sales teams sometimes get special treatment. Are they subject to the same standards when it comes to enforcing the company’s policy against harassment? Does management reward people who should be better role models?

1. Thou Shalt Identify the Investigator. Select an objective and articulate representative of management and go over the designated procedure with him/her, or else arrange for outside training. Consistency and knowledge are critical.

2. Thou Shalt Investigate Promptly. By law, the employer has a duty to take whatever steps are necessary to promptly remedy harassment in order to avoid being held liable. Query: what is “prompt” and what is “remedial action”? What is a reasonable amount of time in which to investigate?

3. Thou Shalt Not Retaliate Against Complainants. When the investigator meets with the complainant, thank him/her for coming in, assure that s/he will not be retaliated against for participating in this investigation, and be sure that all managers and supervisors understand their ongoing obligation not to treat the complainant differently, whether during the investigative phase or after it is concluded. Many is the lawsuit that started as a discrimination claim, only to have the discrimination claim dismissed but the retaliation claim affirmed, with punitive damages.

4. Thou Shalt Provide Interim Relief, if Appropriate. The purpose should be to prevent further incidents during the time it takes to investigate. Interim relief measures might include temporary or other reassignment, paid leave, modifying the reporting or management structure, etc. Take into account any degree of control and amount of interaction between the alleged harasser and reporting individual. Consider whether this could be perceived as better or worse than the status quo.

5. Though Shalt Thoroughly Ascertain all Facts. Determine who you need to interview, in what sequence this will be done, and whether there may be a need to do follow-ups after you have talked to the alleged harasser. Consider these images. What do they teach us about perception, and about how we should investigate?

First, remind employees of the company’s policy by citing them to I tin the personnel manual. Each specific element complained of should be discussed. Interview each alleged harasser separately and notify them that these are serious allegations and that the accompany does not tolerate such behavior.

Us the funnel method where appropriate, moving from general to more specific questions. Ask follow-ups like “what did he do/say?” “why do you believe this is harassing?”, etc.). Determine frequency/type of alleged harassment and, if possible,
the dates and locations where alleged harassment occurred.

Sample questions:

  • Who harassed you?
  • What did they do?
  • When did they do it?
  • Where did it happen?
  • Were there any witnesses?
  • Has your job been affected?
  • Who did you tell or discuss this with?
  • Are you aware of anyone else who has been harassed?
  • Are there any notes, physical evidence, or other documentation regarding the incident?
  • In your statement, you talk about your attendance record. Can you explain this a little more?
  • What did you do in response?
  • What do you want to see happen?
  • Would you like to use our Employee Assistance Program (if company has one)?

Before interviewing the accused, remind this person that he/she should maintain confidentiality about the investigation and not take actions that could be perceived as retaliatory or that would otherwise violate the company’s policy against harassment.

Sample questions to ask the alleged harasser(s):

  • Are you aware that a complaint of harassment has been made against you?
  • This complaint alleges that you have made remarks of a sexual nature to one of your co-workers about her body, and suggesting that she engage in sexual activity with you. What is your response to this?
  • Who else was there?
  • Are there any persons who have relevant information?
  • When was this?
  • What was the context that this came up in?
  • This employee says that you made some graphic remarks about her and when you were looking at a website. Tell me about what brought on this conversation.
  • If the accused employee says the charges are false, ask \"why might the complainant lie?\"
  • Do you have any other relevant information?

6. Thou Shalt Distinguish Facts and Observations from Opinions or “Beliefs”. Questions should be asked in a non-judgmental manner. Find out if any witness observed the alleged harassment. Information should be obtained directly from the participants, not through the grapevine. Try to get the whole story and not accept conclusory responses from witnesses (“He harassed me” is a conclusion. If the reporting individual and the alleged harasser present conflicting versions of the facts, interview any witnesses.

7. Thou Shalt Consider the Complainant’s Input on Possible Remedies.
Sometimes, management assumes it knows what needs to happen, but forgets to consider very simple solutions. Let the complainant know that you will take their suggestions into consideration, and that they should inform their supervisor or you of any other problems that may arise.

NOTE: remedies should be implementable and genuine. In a recent Texas case, a nurse complained about harassment from a doctor. The employer moved the nurse to an area where she would have no contact with the doctor, and asked the doctor to apologize to her. He said he would be happy to apologize for making her uncomfortable, even though he did nothing wrong. The employer’s view of this meeting with the doctor as a “verbal reprimand” was not persuasive in federal court, leaving the court to question whether the employer used “reasonable care” to remediate the harassment. Sanders v. Christus Santa Rosa Physicians Ambulatory Surgical Center, No. SA-13-CV-250-XR (W.D. Tex. 2014).

8. Thou Shalt Consult with the Management Team at the Conclusion of the Investigation and Before Administering any Remedies. After the interviews are completed, the findings should be reviewed, either with your HR director or with counsel, to determine if the allegations are substantiated, and whether they constitute a violation of company policy or the law. If appropriate, disciplinary action should be taken to ensure that such an incident will not happen again. The investigator should consult with the alleged harasser’s manager to determine what discipline is appropriate.

9. Thou Shalt Communicate the Company’s Decision. The accusing employee and the alleged harasser should be informed that employees found to have engaged in sexual harassment are subject to discipline, up to and including dismissal.

Follow up at the conclusion of the process to make sure the complaining employee is not left hanging and knows (s)he can come back if there are further issues. Retaliation against an employee who makes a complaint should be prohibited, and violations should be dealt with.

10. Thou Shalt Document! Planning is critical. Plan at least 45-60 minutes for each interview, but be flexible. If an interview goes too much longer, it can easily turn into a gripe session. Hold the interviews in a private, quiet place without interruptions. At each step of your investigation, document your findings as objectively as possible. Take notes during all interviews and retain evidence. Avoid using conclusory terms. Remember, your written findings will likely be subject to discovery requests if there is litigation later.

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