When do you need an outside investigator?

When do you need an outside investigator?

By: Ann Fromholz
Originally published by the Los Angeles Daily Journal on March 3, 2017.

Many employee complaints can seem very sensitive. Lewd stares, blatant harassment, allegations of criminal conduct.

At what point should HR or inside counsel assign the investigation of an internal grievance to an outside investigator?

A key criterion is bias. If there is a reasonable possibility that opposing counsel in trial could argue that the investigator was biased, take it outside.

There can be an appearance of bias 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 could not 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 guidance from the Equal Employment Opportunity Commission 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.

The EEOC advises employers to select an investigator who can conduct a “thorough and impartial investigation” with 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 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 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.

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 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.

Not only must the investigator have the skills and training to conduct the kind of investigation that’s needed under the circumstances, but 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 did not know what he or she was doing.

Often, the facts and circumstances weigh in favor of hiring an outside investigator. If 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. 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 retain 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. Some investigations are so complex that an employer needs to look outside to find someone capable. 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.