When A Workplace Investigation Finds Fault At The Top

When A Workplace Investigation Finds Fault At The Top

By: Ann Fromholz
This article was originally published by Law360 on August 1, 2017

A workplace investigation will sometimes find fault not only with the offending employee but with the same human resources administrators who may have called for the investigation.

That’s because workplace investigations will sometimes reveal that HR failed to take an opportunity to act before things got too out of hand or failed, at the interview stage, to ask the right interview questions or place appropriate weight on problems logged against the employee at a previous job.

When an attorney who specializes in workplace investigations is called in as an outside workplace investigator and recognizes this type of deficit, he or she must change the strategy of the investigation and any recommendations regarding appropriate corrective action and potential liability against the employer.

The fresh scandal involving the former dean at the University of Southern California’s medical school is one example. USC fired the dean after the Los Angeles Times reported that he used methamphetamine with a prostitute and used drugs on campus and at fundraisers where he represented the university.

A former U.S. attorney and her firm have been hired to investigate. We already know some of what they might find, because the Times published it. The dean, Dr. Carmen Puliafito, faced accusations — not of drug use but of other questionable conduct — at places he worked before USC. Puliafito left the University of Miami in 2007, after a fellow physician sued alleging assault and battery. According to Times articles, during that lawsuit, it emerged in discovery that the University of Miami had also investigated more than one complaint of sexual harassment against Puliafito. When USC hired Puliafito, it likely either knew this information and hired him anyway, or did not do a sufficient background investigation to learn the information.

A similar situation arose at two prominent private schools in the Los Angeles area, in a case that made national news and sent one person to prison. It emerged, through firsthand testimonials, reporting and eventually lawsuits, that the chair of the English department at Marlborough School — who was eventually removed as department chair, but was allowed to continue on as a teacher — had sexual relations with a number of his high school students, impregnating at least one. The teacher joined Marlborough after he was fired from another Los Angeles area private school following accusations that he assaulted a male student. So, like USC, Marlborough did not learn about the allegations of misconduct at the previous school before it hired the teacher, although presumably it could have.

When the conduct came to light, each school involved — Marlborough and USC — launched an investigation led by high­profile lawyers. The schools likely knew the situations were probably made more serious by what happened before the alleged offenders became employees.

The investigation at USC is, from what we know, in its infancy. The investigators will likely determine whether those involved in the process to hire Puliafito acted properly, and within university policy, when they either ignored or did not solicit information from the University of Miami about the sexual harassment allegations. If the people involved in the hiring process acted outside the university’s policies or exercised poor judgment in carrying out the background check on Puliafito, the investigation will likely recommend whether corrective action is appropriate for those failures. The investigators also will likely determine if USC was on notice of Puliafito’s drug use, which almost surely violated university policy and his employment contract, when an anonymous caller called the president’s office in March 2016, as the Times reported one did. If the university was on notice at that time of potential misconduct, the investigators will likely determine whether USC should have launched a prompt, thorough investigation at that time and not now.

All of these findings in the USC investigation are certain to be important if the university faces lawsuits about Puliafito’s conduct by patients, students or employees. They will help USC gauge whether it will face increased liability for failure to prevent certain conduct, or for various kinds of negligence, such as negligent hiring, supervision or retention.

The investigation at Marlborough has finished, and public statements about the findings show that the school received at least two complaints about the teacher’s conduct, the latter of which led to the loss of his role as department chair and required him to go through sexual harassment training. That discipline was intended to be, in the parlance of workplace investigations, “corrective action” to stop the problem. But that action may have been ineffective and too late. The school has been hit with civil lawsuits by two of his alleged victims. In the lawsuits, the plaintiffs allege negligent hiring, retention and supervision. They claim that Marlborough knew or should have known of his tendency toward sexual abuse of students from early on in his time at the school, and that the school’s failure to investigate and take timely action to stop him subjects it to liability. Trial is set for November in Los Angeles.

When an investigator is charged with determining whether wrongdoing occurred, she should examine the entire set of facts, even if some are peripheral to the most pressing issue. Where, as in these cases, possible shortcuts or failures in judgment led to the decision to a bad hire, the investigator should include those findings in her report, regardless of whether the person who was hired eventually engaged in wrongdoing. The investigator should determine who made the decision to take a shortcut, and why they made it. In some cases, managers involved in a hiring process feel — and create — enormous pressure to fill a position in a short time frame, and they can see prophylactic measures like background and reference checks as unnecessary obstacles to hiring someone who initially appears perfect. The investigator’s report should make a recommendation to correct these failures by strictly adhering to policy.

It typically is not the investigator’s role to assess potential liability against an employer. That is the role of the employer’s regular outside counsel. But where, as here, seemingly aberrant decisions are not the wrongdoing that is the focus of the investigation, the factual findings about those decisions can greatly assist the employer’s outside counsel in determining the level of liability to the company that those decisions created.

At the end of the investigation, the company’s top managers might need to make some tough decisions about whether to hang on to the offending employee — as well as the HR screener in the office next door.