Part I of this article appears in the December 2004 issue and Part II appears in the January 2005 issue of The Metropolitan Corporate Counsel.
The Investigation ReportAnd Remedial Action
After completing the investigation, the objective facts and subjective impressions should be examined to determine an appropriate course of action. The weight of the evidence supporting and opposing the complaint should be compared. Consistencies or inconsistencies in the witnesses' statements should be examined along with any evidence tending to corroborate or refute them. Consider the demeanor of the witnesses, the timeliness of the complaint and the motivation of the witnesses to determine their credibility. Also consider whether the complainant has a history of making similar complaints and whether other individuals have made similar complaints against the accused. A concise report should be prepared, including
- A statement of the complaint;
- The names of the complainant, the accused, all witnesses, and the dates and times that each interview took place, and who was present during each interview;
- A summary of statements received from the complainant and the accused;
- A summary of each interview;
- An explanation of all factual issues that the investigator was unable to resolve; and
- If appropriate, a summary of the investigator's mental impressions regarding credibility of the interviewees.
In formulating a recommendation, consider whether any of the company's policies, guidelines, or practices were violated and, if so, the seriousness of the offense. It is important to understand how similar violations have been handled in the past. The selected disciplinary action, if any, should "fit the crime." In making this determination, consider how long the accused had been employed by the company and whether his or her performance history includes any other policy violations.
The appropriate disciplinary action may include any of a wide variety of options, such as:
- Change reporting relationships so the accused will not be able to influence the complainant's terms and conditions of employment. (Note: transferring the complainant may not be permissible without the complainant's consent or if the transfer is to a less desirable position or location).
- Terminate, suspend, demote, or transfer the accused.
- Place the accused on probation.
- Place a written disciplinary warning in the accused's file.
- Require the accused to undergo appropriate training.
- Make compensation adjustments.
- Reprimand the accused with instructions to avoid contact with the complainant.
After the investigation has been completed, the complainant and the accused should be (1) notified in writing of the results of the investigation and that appropriate remedial action is being taken; (2) reminded of their confidentiality obligations; (3) encouraged to ask questions; (4) given the name of a person to contact regarding the investigation; (5) encouraged to supply management with additional information that may be obtained in the future related to the investigation; and (6) informed of the company's policy prohibiting retaliation.
The company's action or inaction will send a message to other employees. Competing factors must be considered in determining who should be advised of any actions taken as a result of the investigation. Publishing corrective action has the advantage of deterring potential harassment in the future, increasing employees' faith in complaint procedures, and enabling the company to use publication of corrective action in future lawsuits to refute a plaintiff's allegations that complaining would have been futile. Publishing corrective action has some disadvantages. Working relationships in the complainant's or accused's work group may be disrupted, and the accused may bring claims under various discrimination, common-law tort or contractual theories.
Potential Actions By Accused
Implied and Express Contract Claims. Carefully drafted handbooks, policies, procedures and training manuals help refute implied contract claims alleging that the accused should have been disciplined in less severe ways. In any employment contract between an employer and the accused, the termination for "cause" provision typically requires that the accused actually be guilty of misconduct.
Defamation Claims. If the accused brings a defamation claim for publicizing the disciplinary action, a qualified privilege may exist for statements made in furtherance of a legitimate business interest (such as providing accurate information on a performance appraisal) or matters of common interest to employers and employees. See Malik v. Carrier Corp., 202 F.3d 97 (2d Cir. 2000) (affirming dismissal of defamation claim based on statements made by human resources representative in connection with investigation of allegation of sexual harassment on grounds that statements made within the scope of the representative's employment and without malice are privileged) (Connecticut law). This qualified privilege may not be available in the event of:
- Excessive publication to persons not within the circle that has "an interest or duty 'corresponding' to the interest or duty that creates the privilege." Stockley v. AT&T Information Systems, Inc., 687 F. Supp. 764, 769-70 (E.D.N.Y. 1988) (finding that communications made among employer's executives in connection with a bona fide Title VII investigation are protected by a qualified privilege).
- Malice (i.e., making a statement with knowledge that it is false or with reckless disregard of the truth or falsity of the facts stated). See Kelly v. City of Meriden, 120 F. Supp. 2d 191 (D. Conn. 2000) (denying summary judgment where the supervisor could not substantiate her statement that the employee had been involved in multiple unprofessional incidents).
Employers should conduct any investigation in good faith and carefully assess all communications concerning the results of the investigation and the corrective action taken. Moreover, employers should be extremely careful that any statement made to employees does not create false inferences about the accused's conduct or could be susceptible to defamatory innuendo.
Sarbanes-Oxley Act (SOX)
The investigation techniques discussed above and in Parts I and II of this article are applicable to all investigations, including investigations undertaken pursuant to the Sarbanes-Oxley Act. Section 806 of SOX provides whistleblower protection to employees of public companies who disclose information concerning fraudulent activities within their companies. The statutory language extends to officers, employees, contractors, subcontractors and agents and appears to contemplate individual liability for any person guilty of taking an adverse employment action or otherwise discriminating against any individual for having engaged in a protected activity. Protected activities include disclosing information or otherwise assisting federal regulatory agencies, law enforcement agencies or Congress and assisting in a proceeding alleging a violation of SEC rules or regulations or another federal law relating to fraud against shareholders. Protection is extended to employees who complain to a supervisor or other employees "who have the authority to investigate, discover, or terminate other employees for misconduct." An "adverse action" includes discharging, demoting, suspending, threatening, harassing, or in any manner discriminating against an employee in the terms and conditions of employment."
Employers must take great care in considering the termination, suspension, demotion or reassignment of any employee who complains. Human resources professionals should be trained to identify and properly report activities that are protected by SOX and ensure that no retaliation, discrimination, or adverse employment action is prompted by such activities.
Conclusion
Conducting a prompt, thorough and impartial investigation of an employee's complaint of discrimination or harassment is critical in terms of ensuring compliance with applicable laws and company policies, enhancing employee relations, and preventing legal liability. While even the best employment practices cannot stop an employee from filing a claim of discrimination or harassment, they provide the employer with a strong avenue of defense when a lawsuit does arise.
Organizing, planning and documenting an investigation are essential. Honing your investigatory skills will help you to reach the right conclusion and take the appropriate corrective action. In the event that litigation should arise from an employee's complaint of discrimination or harassment, your demonstrated commitment to conducting an effective investigation is your most powerful defense against a claim that the company condoned unlawful workplace discrimination or harassment.
Published February 1, 2005.
