When the Workplace Grievance is Too Hot to Handle

When the Workplace Grievance is Too Hot to Handle

By:  Ann Fromholz
Originally published by Law360 on February 22, 2017

More and more often, employers receive employee complaints ranging from informal grievances of harassment, discrimination, and retaliation to formal complaints that the company has engaged in criminal conduct.

The employer needing to investigate the issue can be faced with a difficult decision: Assign the investigation to someone in human resources or engage an outside investigator? As with so many legal questions, the answer depends on the circumstances.

The investigator must fully understand both the claims and the implications of the investigation. In most cases, an investigator will use the company’s internal policy, and not the law, as the standard by which to determine if there was a violation. The investigator also must understand the standard to which his or her investigation is held.  In California, courts have held that the investigation must be adequate under the circumstances, give notice of the claimed misconduct and a chance for the offending employee to respond, and must reach a reasoned conclusion.[i]

In its Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors, the EEOC advises employers to select an investigator who can conduct a “thorough and impartial investigation” and who has no stake in its outcome.  The EEOC Guidance also advises that the investigator be “well-trained in the skills required for interviewing witnesses and evaluating credibility.”

Finally, the EEOC Guidance advises that, during the investigation, “[t]he alleged harasser should not have supervisory authority over the individual who conducts the investigation and should not have any direct or indirect control over the investigation.”

These factors can become very important if the investigation becomes part of the employer’s defense of a lawsuit.  If an employee is fired because the investigation determines that he or she engaged in misconduct, the employer likely will choose to make the investigation part of its defense of the case.  Likewise, if the employer declines to act because the investigation found no misconduct, the complaining employee may sue, and the employer again may choose to incorporate the investigation into its defense.

Not only must the investigator have the skills and training to conduct the kind of investigation that’s needed under the circumstances, but if the investigation becomes part of litigation, the investigator must be able to testify as a competent, unbiased, and qualified investigator.

The investigator will be subjected to rigorous cross-examination. Often, if the investigator is untrained, or under-trained, in conducting workplace investigations, the cross-examination can destroy the credibility of the investigation by demonstrating – or even implying – that the investigator lacked sufficient training and didn’t know what he or she was doing.

Even when the investigator is experienced, if the report and other documentation do not provide a clear explanation of the investigation process and the findings, the investigation can be vulnerable to attack. In addition, if evidence arises in litigation that contradicts some of the findings of the investigation, a jury may become convinced that the investigator was biased or was pressured to find in the employer’s favor.

The question of bias arises when an employer uses an investigator who is – or who appears to be – vested in the investigation. In some cases, employers use an internal investigator who is involved in some way with the incidents being investigated.  If the investigator witnessed an incident that is part of the investigation, he or she cannot be an impartial investigator; he or she is now a witness.  Similarly, employers often use an internal investigator who is in the reporting chain of the person being investigated.  In this case, the investigator may be susceptible to pressure and may not be able to be neutral.  Finally, an investigator may have supervisory authority over witnesses or the accused, which will affect the perception of their credibility and, thus, the credibility of the investigation itself.

Even if an internal investigator who is in the reporting chain with the accused employee or with witnesses is impartial, a jury may still believe that the investigator couldn’t remain neutral.  Likewise, employees who might complain to the employer and must rely on the employer to keep the workplace free from harassment may perceive that the employer is not taking steps to eliminate harassment if they believe that the person who investigates misconduct is motivated to find that misconduct does not exist.   If this happens, employees will be unwilling to bring complaints to the employer’s attention and to subject themselves to an investigatory interview.

To this end, the EEOC Guidance provides that a person accused of wrongdoing “should not have supervisory authority over the individual who conducts the investigation and should not have any direct or indirect control over the investigation.” In other words, the investigator should have no stake in the outcome of the investigation.

Employers have several options when selecting an appropriate investigator.  The employer may choose an internal human resources professional who is adequately trained in workplace investigations. The employer may choose in-house counsel, or elect to retain outside counsel.

Often, the facts and circumstances weigh in favor of outside counsel. If, as discussed above, the level or position of the employee being investigation, or of witnesses or others involved in the investigation, create a dynamic that would make it difficult for an internal investigator to be – or appear – impartial, the employer should retain an outside investigator. These situations arise, for example, when the accused is a high-level company executive or is within the legal or human resources department. In addition, many small and medium sized businesses simply do not have anyone internal who is trained and qualified to conduct an investigation.  In some cases, the complaining party or the accused retains counsel, which increases the complexity of the investigation.  In other cases, the complaint alleges criminal conduct.  In all of these cases, the employer is well-advised to retain an outside investigator.

In addition, some investigations are so complex that an employer needs to look outside to find someone capable of handling the investigation.  The investigation may touch on legal questions involving surveillance, employee privacy, recording communications, defamation, and confidential company information.  More and more investigations require the investigator to understand the legal nuances surrounding social media evidence and electronically stored information.  Most often, an outside investigator has this capability and expertise.

An outside investigator also is more likely to have experience testifying at deposition and trial and, therefore, is less likely to stumble under cross-examination.

When the employer elects to engage an outside investigator, it is important that the investigator should not be the lawyer – or in the law firm – who will defend the company if the investigation results in litigation.  Hiring the same person – or firm – to do the investigation and defend the lawsuit invites all manner of problems, from potential conflicts of interest to an appearance of bias (especially if the representation is an ongoing one) to problems maintaining the attorney-client privilege.  An employer’s usual outside counsel, however, often is an excellent resource to refer the employer to a qualified third-party investigator.

There are certain considerations that the investigator and the employer must address when an outside investigator is retained:

  • First, the employer must determine who will direct the investigation and to whom the investigator will report.
  • Second, the employer and investigator must determine the scope of the investigation. Often, employees who are interviewed raise issues beyond the scope of the original investigation, and the employer and the outside investigator must determine at the outset how those issues will be handled.
  • Third, the employer and the investigator must work together to ensure that the investigator has access to all the witnesses, information, and evidence that he or she needs. If an employer denies the outside investigator access to people or information to whom the employer has access, a seasoned investigator will note that in the investigation report and it will affect the credibility of the investigation.
  • Fourth, the investigator and employer must decide if the investigation will be conducted under the attorney-client privilege. This, of course, only is an option if the outside investigator and/or the person directing the investigation are attorneys.  It is important to know, however, that if litigation results from the situation, the employer may elect to waive the privilege and make the investigation part of its defense.  Therefore, when an investigator prepares a report, he or she should assume that it will be seen by a jury and should write the report accordingly.

An employer faces significant potential liability from complaints of workplace misconduct, and from the personnel decisions that often follow. Therefore, the selection of an appropriate person to investigate complaints of workplace misconduct is a very important one and can significantly affect the employer’s liability for claims.  Often, the best investigator is an outside attorney because that person is impartial, well trained, and able to withstand the scrutiny of litigation.

Harassment at work can take many forms

Harassment at work can take many forms

By: Kevin Smith
Originally published by the Pasadena Star-News on February 15, 2017

Businesses are under increasing scrutiny these days, whether it’s financial scrutiny, monitoring of conflict-of-interest issues or sexual harassment.

And while companies hope to remain in line with established workplace policies and procedures, situations still arise. When that happens, they typically call in a third-party attorney to investigate and see how much validity there is to the allegation of wrongdoing.

These kinds of issues are typically brought to light by an employee who feels they’ve been mistreated in some way, or in other cases by the company itself, which is seeking to be as transparent as possible for the sake of both the employee and the business.

Needless to say, businesses are looking to protect themselves from potential liability in the event that an employee wants to file a lawsuit.

So who do companies turn to when a situation like this arises? Some call Ann Fromholz.

“That’s one of the things I do,” said Fromholz, owner of The Fromholz Firm in Pasadena. “I’ve been an employment lawyer for more than 22 years and workplace investigation is one of my areas of practice. I’ve performed hundreds of workplace investigations.”

Fromholz is methodical when she’s called in to investigate a claim, whether it’s sexual harassment, fear of retaliation for reporting misconduct or any number of other things can make the workplace a toxic environment.

“Companies are required by law to conduct a workplace investigation when they are put on notice,” she said.

“That’s why they hire me. If there is a lawsuit they need an independent and impartial investigation.”

In the case of alleged unwanted sexual advances, for example, Fromholz will check out emails, phone calls and texts that may have been exchanged between the two parties, as well as video surveillance that might place someone at a certain location at a certain time.

She’ll also interview coworkers at the business who may have witnessed incidents where someone was sexually coerced or abused in some way. Then she’ll interview the company’s management, and finally, the two parties who are involved.

“My job is to be a fact finder,” she said. “I am not part of the decision involving what happens to the employee.

That could range from training on what sexual harassment is, to counseling — and in aggressive cases people have been terminated. But I’m not part of that decision.”

The Association of Women for Action and Research (AWARE) reported in 2008 that as more women have entered the workforce their vulnerability to harassment has also increased. The association’s study of 500 respondents from 92 companies revealed that 54 percent had experienced some form of sexual harassment in theworkplace. Digging deeper, 27 percent of the respondents said they experienced harassment by a colleague while 17 percent were harassed by their superior.

And lest you assume that sexual harassment happens only to women, consider this: Seventy-nine percent of the victims in AWARE’s study were women, but 21 percent were men.

NOLO, a Berkeley-based publisher of do-it-yourself legal books and software, offers two simple pieces of advice to help businesses protect against incidents of sexual harassment —monitor your workplace and take all complaints seriously.

Simple but sound advice.