Workplace Investigations: How to get them, how to use them and how to fight them
By Jeremy Pasternak and Curt Surls
Workplace investigations are different than the typical pre-litigation investigation in most civil claims. The adequacy and thoroughness of the defendant’s investigation is simply irrelevant in most civil actions. In employment discrimination claims, however, the adequacy of the employer’s investigation of the initial complaint could be a critical issue in the subsequent litigation.
Under California and federal law, a complaint of discrimination or harassment may require the employer to conduct a prompt, thorough and impartial investigation. Sometimes, the investigations are performed internally by a Human Resources or legal professional. For more serious allegations, or charges that could implicate senior managers, companies are increasingly turning to outside workplace investigators.
If your client is involved in a workplace investigation, you should recognize these investigations as a potentially valuable discovery tool or an opportunity to make the employer look heavy-handed and abusive. This article will address how to obtain the investigative report, how to use the report, and how to attack the investigative process if it appears to have been done in bad faith. We are focusing mostly on harassment investigations, which are probably the most common workplace investigations. However, the principles outlined are applicable to any investigation of a complaint of discrimination, harassment or retaliation.
WHEN DOES THE DUTY TO INVESTIGATE ARISE?
As a threshold matter, California courts and California’s Fair Employment and Housing Commission (“FEHC”), require employers who receive complaints – particularly of sexual harassment – to investigate promptly and take appropriate remedial action. Under California law, the failure to investigate a complaint of sexual harassment can itself be a basis for liability under the FEHA. (See, e.g., Gov. Code § 12940(k).) Federal law (Title VII) imposes a similar investigatory obligation. (See, e.g., EEOC Policy Guidance on Current Issues of Sexual Harassment, EEC Notice No. N-915-050 [“When an employer receives a complaint or otherwise learns of alleged sexual harassment in the workplace … the employer is obligated to investigate the allegation promptly and thoroughly.”] The duty to investigate attaches even if the complainant does not request or consent to the investigation. (E.g., Hollis v. Fleetguard, 668 F.Supp. 631, 632, 637 (M.D. Tenn. 1987), aff’d, 848 F.2d 191 (6th Cir. 1988).)
In 1998, the U.S. Supreme Court offered a further incentive to employers to investigate employment discrimination claims. In Burlington Industries v. Ellerth (1998) 524 U.S. 742 and Faragher v. City of Boca Raton (1998) 524 U.S. 795, the U.S. Supreme Court provided employers a defense to a harassment claim if: (1) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.
While such an investigation is not a complete defense to liability under California law, under the “avoidable consequences” doctrine, an employee who unreasonably fails to take advantage of the employer’s preventative measures (e.g., complaint process), may have their potential damages reduced. ( State Dept. of Health Services v. Superior Court (McGinnis) (2003) 31 Cal.4th 1026, 1045.)
Faced with these incentives, employers generally will commence some sort of investigation, if for no other reason than to hopefully avoid liability or reduce potential damages.
OBTAINING THE WORKPLACE INVESTIGATION
The employer often attempts to use its sexual harassment investigation as both “sword and shield.” The employer cannot avoid liability by trumpeting its investigation and remediation, while at the same or work product doctrine to thwart discovery into the facts and findings of the investigation.
A. Prior to litigation
We do not assume that these issues arise only once litigation has commenced. For example, a potential client might call you complaining that she is being retaliated against for having made a complaint of sexual harassment. Obviously, it would be interesting to know if there had been an investigation, what information was gathered, and what conclusions were reached.
Employees have a right to inspect their personnel files. (Calif. Labor Code § 1198.5.) The California Labor Commission has opined that “personnel file” includes “Investigation of FEPC [Fair Employment Practices Commission] or EEOC matters,” and this concept has been adopted by the California courts. ( Wellpoint Health Networks v. Superior Court(1997) 59 Cal.App.4th 110, 124.) That same court held that the attorney-client and work-product privileges can create exceptions to what might be considered a more general “right of inspection.” These are discussed below. But as a practical matter, if a current employee wants to see an investigative file, and the investigation was not performed by a lawyer, the employee arguably has a right to see it as part of the personnel file.
This obviously raises a bit of a practical issue, namely, how a current employee is going to start making “legal” demands (much less quote case law) without bringing in a lawyer. Put another way, if the employer is unwilling to assume that the employee has a right to the investigation, that employer is unlikely to be swayed. At the same time, there is nothing wrong with advising a potential client to call the California Labor Commission, who can tell the employee the same thing, after which the employee can pointedly state to Human Resources, “Well, I called the Labor Commission and they said ….”
Of course, if involved in pre-litigation negotiation (whether or not the employee is still employed), the employee’s attorney can take the same position. And if the employer’s attorney balks, it is not at all hard to point out that the investigation is going to be discoverable. It is also worth noting that the employer’s attorney might not balk. After all, if the “investigation” was more of a “CYA,” the employer might be more than happy to produce it.
One interesting note here is that the Labor Code does not actually mandate that the employer provide the personnel file itself, only those documents which have been signed by the employee. But it does call for a right to inspect at or near the employee’s place of work. And it is the rare employer who wants an ex-employee to come back into the workplace. More often than not, when faced with the choice, the employer will simply send a copy of the personnel file.
B. Obtaining the “privileged” file in discovery
1. The Wellpoint case
We now turn to investigations conducted by or at the direction of attorneys. It is common these days for employers to have attorneys perform workplace investigations. There are a variety of reasons for this. “Going to a lawyer” may appear a logical default for a complaint which implicates legal protections. Human Resources personnel may be afraid they lack the skill to conduct the investigations (see discussion below regarding choosing the proper investigator).
If a lawyer conducted or directed the investigation, it is a fair bet that it is not going to be turned over merely at the employee’s request. As discussed above, it more likely will be turned over at an attorney’s request.
For this part of our discussion then, we assume that this is an investigation report being sought in discovery.
The leading case on the issue is Wellpoint, referenced above. In Wellpoint, an employee complained of discrimination and retaliation while still employed. A law firm was hired to investigate the claims. The investigation included various interviews and even correspondence with the employee, which stated that the charges had been “taken seriously” but that his claims were unsupported by the investigation. Thereafter, the employment ended (ostensibly because of a layoff) and suit was filed. ( Id., at 115, 117.)
The investigation materials were sought in discovery, both from the employer and directly from the attorney (who was now defending the litigation). The employer and their counsel objected, and motions to compel were brought. The trial court ordered the communications produced, on the basis that the lawyer had been acting in a “non-attorney” capacity, and that therefore privilege did not apply (also relying in part on Labor Code § 1198.5). The employer took a writ.
Although the appellate court overturned, it did not disagree with the basic premise of the trial court:
The courts in [prior] cases recognized that even though an attorney is hired to conduct business affairs, he or she may be called on to give legal advice during the course of the representation, and documents related to those communications should be protected notwithstanding the original purpose of employing the attorney. The trial court should not have given McCombs carte blanche access to Lafayette’s investigative file, but should have based its ruling on the subject matter of each document.
( Id., at 122.)
In other words, discovery of a lawyer’s investigative materials depend on which “hat” the attorney was wearing at the time the investigation was conducted. That of the corporate officer doing the company’s business? Or that of the attorney representing his client?1
2. The Wellpoint Catch-22
The Wellpoint court’s ruling would appear to put the employee and their counsel in an impossible position; all the employer has to do is say, “yes, they were representing us as our lawyers,” right? Not necessarily.
The Wellpoint court next turned to a basic legal premise: that employers have a duty under the law to investigate complaints of discrimination and harassment, and to take remedial action if necessary. And this is a standard defense, i.e., that the employer took prompt remedial action.
This creates a “Catch-22” for employers and their attorneys. The court held that if an attorney is hired to conduct the investigation, and if the adequacy of that investigation is relied upon by the employer (as it presumably will be), then the employer has waived both the attorney-client and work-product privileges and the investigation materials must be produced.
If a defendant employer hopes to prevail by showing that it investigated an employee’s complaint and took action appropriate to the findings of the investigation, then it will have put the adequacy of the investigation directly at issue, and cannot stand on the attorney-client privilege or work product doctrine to preclude a thorough examination of its adequacy. The defendant cannot have it both ways. If it chooses this course, it does so with the understanding that the attorney-client privilege and the work product doctrine are thereby waived.
( Id., at 128.)
3. The Kaiser “narrowing”
Wellpoint was quickly followed by Kaiser Foundation Hospitals v. Superior Court (1998) 66 Cal.App.4th 1217. In that case, “Kaiser performed a prelitigation in-house investigation through a nonlawyer human resources specialist and then produced its entire investigation file in discovery, only claiming attorney-client or work product protection of certain specified documents consisting of attorney-client communications.” ( Id., at 1227.)
The court held that “where a defendant has produced its files and disclosed the substance of its internal investigation conducted by nonlawyer employees, and only seeks to protect specified discrete communications which those employees had with their attorneys, disclosure of such privileged communications is simply not essential for a thorough examination of the adequacy of the investigation or a fair adjudication of the action.” ( Id., at 1227.)
Kaiser (as well as Wellpoint) remains good law. So what to make of the investigation that was guided (possibly strategically) by a lawyer? The answer is primarily strategic: Show a sham investigation for what it is.
ATTACKING THE WORKPLACE INVESTIGATION
Once you have received the investigatory file, it’s time to explore potential bias or inadequacy in the workplace investigation. An excellent source for guidelines and general information about conducting an adequate and legally compliant harassment investigation is available on the EEOC website, at http://www.eeoc.gov/policy/ docs/currentissues.html. The EEOC guidelines provide an excellent template for analyzing the investigation and deposing the investigator.
As a general matter, note that quite often the investigatory report will consist primarily of “fact-finding,” confirming or refuting allegations, or making no determination. Most reports will avoid reaching a legal conclusion, such as “this was sexual harassment.” However, the report may confirm a violation of company policy, which will generally have broader prohibitions on certain conduct than required by law.
Areas of analysis following an investigation are detailed below.
A. Was the proper investigator selected?
Earlier, many sexual harassment investigations were done by internal investigators, typically human resources employees. (See e.g., Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256.) The trend clearly has been toward utilizing neutral, outside investigators, although courts have approved the use of both internal and external investigators. (See, e.g., Dominic v. DeVilbiss Air Power Co. (8th Cir. 2007) 493 F.3d 968.
To the extent an investigator is to be used, it’s crucial that the individual not have, as one court explained, “an axe to grind.” (See, Nazir v. United Airlines (2009) 178 Cal.App.4th 243. In Nazir, the investigator was so biased against the complainant that the court held that the investigation “can itself be evidence of pretext.” ( Nazir at 325.) Needless to say, an investigator should not be involved in any of the incidents that prompted the investigation (as in Nazir), nor should the investigator be under the supervision of the alleged harasser. When the alleged harasser is highly-placed, an outside investigator should usually be retained. If not, you can argue that the investigator was intimidated by the defendant.
Whether an internal or outside investigator is utilized, the investigator should be experienced and well-trained. (See, Silva, supra, at 272 [investigator “had been trained by in-house counsel on how to conduct an investigation”].)
Accordingly, any deposition of the investigator should focus on their training and relationship with the parties. With respect to outside investigators, there is now an excellent professional organization for workplace investigators called the “Association of Workplace Investigators.” The website includes a member list at www. aowi.org. When deposing the investigator, explore whether the investigator is a member of AOWI and whether they have attended the annual AOWI conference or any of the numerous webinars. Further, AOWI conducts an annual week-long Training Institute for workplace investigators, which is arguably now the gold standard in workplace investigation training. In deposition, the investigator should be asked if they have completed the training (bear in mind that many well-respected and experienced workplace investigators are Institute faculty and not attendees). As the profile of AOWI grows, it will be harder for a workplace investigator to justify not participating in the organization’s extensive training sessions.
Obviously, when deposing the investigator, you will want to examine their qualifications and experience. The above should provide the basis for specific questions along those lines. But also note the strategic importance of this. Nobody wants to feel stupid or uninformed. Your witness may well get defensive. But if you can push things in the right direction, that witness may be in a position to concede that they did not have sufficient training and blame someone else for either not providing it or assigning the investigation to them in the first place.
B. Was the investigation initiated promptly after the employer knew or should have known of the harassment?
Once an employer has received a complaint of harassment, or knows or has reason to know that harassment is occurring in the workplace, an investigation should commence promptly.
There is no single definition of “prompt” in the context of initiating an investigation. Variables unique to each situation impact the “promptness” analysis, including the number of witnesses and the complexity of the allegations. Of course, in harassment situations where the complainant remains in harm’s way, the investigation must be commenced immediately to prevent further harm.
So look into the timing and carefully question HR and the investigator as to the circumstances behind any delay. Note that delay in commencing an investigation could be characterized as acquiescence, approval or indifference to the hostility of the employee’s work environment. A delayed investigation is arguably a violation of the FEHA: Government Code § 12940(j)(1) makes it unlawful for an employer to fail to take ” immediate and appropriate corrective action.” (Emphasis added.) Most courts have held that barring unusual circumstances, an investigation commenced within a day to a week of the complaint is sufficiently prompt (unless, of course, the complainant remains in a hostile work environment).
The take-home message is therefore to attack a delayed investigation or remedial action (especially if your client remained or remains in “harm’s way”).
C. Was the investigation thorough and complete?
It is worth noting again here that there are causes of action for “Failure to Investigate” and “Failure to Take Prompt Remedial Action.” Therefore, the authorities below not only describe an employer’s duties, but should also provide a source for strong special jury instructions.
A properly-conducted sexual harassment investigation should not only be prompt, it should also be thorough. Often, an employer’s investigation will focus solely on interviews with the alleged harasser and the complainant. The allegations are then deemed by the employer to be “unsupported” and the investigation characterized as “inconclusive.” This may be inadequate.
For example, the employer in Brooms v. Regal Tube Co., 881 F.2d 412 (7th Cir. 1989) based its decision to mildly reprimand the harassing supervisor on interviews with only the complainant and the accused supervisor. The jury found the company liable for hostile environment sexual harassment in part based on the company’s failure to adequately investigate the complaints at an early stage.
Similarly, the Ninth Circuit in Fuller v. City of Oakland (9th Cir. 1995) 47 F.3d 1522, criticized the employer’s investigation because there was no effort to seek corroboration from co-workers and others. In Nazir, supra, the deeply-biased investigator did not bother to interview several directly relevant witnesses to counter accusations that had been made against the complainants. The court noted that, “[a]n employer’s failure to interview witnesses for potentially exculpatory information evidences pretext.” ( Id. at 280.)
The Equal Employment Opportunity Commission offers its own investigators extensive guidance on the steps they should take when investigating harassment complaints. (See EEOC Compliance Manual (CCH) 615,3114 (1992).) The Commission notes that because sexual harassment often lacks eyewitnesses, the EEOC investigator should search thoroughly for corroborative evidence of any nature. Corroborative evidence includes other victims of the harasser and individuals with whom the complainant contemporaneously discussed harassment. The EEOC requires that the investigation seek corroboration for the allegations of both the complainant and the harasser(s).
The need for a complete investigation is underscored by case law deeming the complaints and observations of female employees other than the complainant to be admissible in sexual harassment litigation. In Heyne v. Caruso, 69 F.3d 1475 (9th Cir. 1995) the court found that the probative value of the testimony of other victims of the same harasser outweighed any alleged unfair prejudice. The court held that because of the “inherent difficulty of proving a state of mind” of the harasser, corroborative “me too” testimony of other victims made it more likely that the perpetrator viewed female workers as sexual objects. ( Id. at 1480-1481.) 2
The complainant should be asked for corroborative witnesses, and in most cases the investigator should attempt to speak with all of them, unless it becomes apparent that many witnesses are cumulative.
The case law is clear. The employer cannot bury its head in the sand and conduct a “selective” and superficial investigation designed primarily to undermine the complainant and protect the accused. An investigator who concludes an investigation prematurely with a finding of “no substantiation” is vulnerable to deposition questioning about the thoroughness of that investigation. That vulnerability can almost certainly be heightened through some rather simple introductory questions:
You understand that you (or an employer) have a responsibility to investigate a complaint of harassment, correct?
And what is the purpose of that?
To be sure that nobody is being harassed, right?
And you take that obligation seriously, right?
You agree that it is critical that employees not be discriminated against and harassed?
That this person has made a complaint, and that it must be taken seriously, right?
Your job isn’t to just protect the company from the complaint, right?
Your job isn’t to gather evidence to “fight” the complaint, right?
And your duty is to consider the complaint in good faith, right?
And that’s what you were doing here, right?
And it was your intention that whatever evidence you gathered, and whatever interpretations or conclusions you made, it was solely for the purpose of making a good faith investigation, right?
Of course, no Human Resources personnel or other investigator would ever contradict these premises (unless you are really, really lucky). The investigator having confirmed them, it then becomes that much easier to poke holes in the investigation and its conclusions.
D. Was the employer’s remedial action adequate?
Once an employer has determined that harassment or discrimination has occurred, the employer must take corrective action designed both to halt the harassment and minimize the risk of reoccurrence. ( Intlekofer v. Turnage, 973 F.2d 773, 778-779 (9th Cir. 1992).) Appropriate corrective action usually means disciplining the harasser.
Cases have addressed various types of corrective action undertaken by an employer with different results. Some of the typical remedial actions include the following:
• Verbal or Written Reprimand
A few cases early cases held that an oral instruction from the employer to the perpetrator to refrain from harassing conduct can be sufficient. ( Steele v. Offshore Shipbldg., 867 F.2d 1311, 1314, 1314 (11th Cir. 1989).) But, in light of Intlekofer and other later cases, the “one free bite” verbal warning may not be enough, especially when the warnings do not end the harassment.
Employers should, at a minimum, impose some sort of formal discipline, documented in writing, for a first incident. Repeated verbal discipline is strong evidence that the employer’s remedial response was inadequate and/or insincere.
• Transfer of the Perpetrator
Another common disciplinary action imposed by employers in response to a sexual harassment investigation is the separation of the complainant and the harasser. However, the perpetrator’s mere presence may constitute a hostile work environment for the complainant: “If harassers are not removed from the workplace when their mere presence creates a hostile work environment, employers have not fully remedied the harassment.” ( Ellison v. Brady, 973 F.2d 773 at fn. 19 (9th Cir. 1991).) However, the law is clear that the complainant’s terms and conditions of employment should not be adversely effected by the transfer. (See, e.g., Guess v. Bethlehem Steel Corp., 913 F.2d 463 (7th Cir. 1990).)
Accordingly, the employer’s remedial action is susceptible to attack if the complainant’s terms and conditions of employment have been negatively impacted in any way.
• Discharging the Harasser
In certain circumstances, firing the perpetrator may be an appropriate response, and the employer’s failure to do so may be considered inadequate remediation. For example, the court in Ellison stated that sometime harassers must be fired even if they didn’t realize that their conduct was unlawful. ( Id. at fn. 19.)
Finally, for a discussion by an appellate court of a sexual harassment complaint properly handled, see Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256. There, the investigation was guided by a written policy setting forth the investigator’s procedures, the investigator was unbiased and well-trained, the investigator acted promptly and thoroughly documented his procedures and conclusions, the questions asked were relevant, open-ended and non-biased, confidentiality was maintained to an appropriate degree, and he permitted follow up information from witnesses and frequent opportunities for a response by the complainant and the accused.
Accordingly, for the cautious plaintiff lawyer, the workplace investigation can be an excellent opportunity for free discovery and provide a deposition template for deposing the key parties in an employment discrimination matter.
1 The court also noted that in camera inspections were not the appropriate means to determine this, as even a Superior Court judge cannot demand to see attorney-client privileged documents. ( Id., at 121.) The court did, however, hold that an in camerainspection can be performed to determine if the (qualified) work-product privilege applies. ( Id., at 122.) How often the latter actually occurs without objection based on the former is anyone’s guess.
2 See also Johnson v. United Cerebral Palsy, Etc. (2009) 173 Cal.App.4th 740, and Pantoya v. Anton (2007) 198 Cal.App.4th 87 regarding the admissibility of evidence regarding other victims.