Limitations of Internal Investigations – Don’t only lip-service

Companies must investigate discrimination, harassment or retaliation claims that arise. This requires in-house legal and HR departments to interview witnesses, review documents, analyze evidence and reach conclusions. Given the magnitude that an in-house investigation can sometimes take, in general the company wants to showcase the thoroughness and meticulous nature of the investigation. A recent court decision shows why hiring an external neutral investigator may be in your best interest.

A long-time employee lodged an internal complaint alleging age discrimination. The internal investigation ultimately concluded that the company had treated the employee fairly but before trial, the employee moved to exclude the investigation from being admitted into evidence. The company argued that it supported the company’s motives for the employee’s termination. The court rejected the company’s argument and use of the internal investigation.

Of critical importance was the court’s finding that the investigation was one-sided. The investigation was not conducted by a neutral party, but rather the company’s HR representative; the witnesses and evidence were selected by the HR representative; and there was no hearing and no opportunity for the employee to cross-examine or rebut the evidence offered against him. In addition, the HR representative admitted that he would have discontinued the investigation had the employee signed the severance agreement. 

Some takeaways from this case useful for employers:

1. Never assume that a jury will ever know that you conducted a thoughtful and diligent investigation. This does not mean that you should not conduct an investigation – just understand that the fact you conducted one may not come into evidence.

2. Where circumstances warrant, hire a third party to conduct the investigation so it truly could be considered neutral.

3. If a neutral investigation is too expensive, ensure that the employee has the opportunity to “submit evidence,” either by identifying witnesses, submitting documents, or otherwise being specific about their complaint.

4. Once a company starts an investigation; it should always finish it. Shortcutting investigations can create the impression that the company is only paying lip-service to its EEO policies.

If a company that prohibits discrimination, harassment and retaliation is faced with a claim that its policy has been violated, it needs to get to the bottom of the issue. And, it needs to demonstrate that as soon as it learned of the potentially inappropriate conduct, it responded promptly to correct it. Otherwise, it runs the risk that its policy is nothing more than words printed on paper.

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