On September 15, 2021, a divided panel of the Ninth Circuit Court of Appeals decided…
Lawsuit Prevention for Employers
In This Issue: WHEN WORKPLACE INVESTIGATIONS ARE REQUIRED BY LAW, AND WHY EMPLOYERS SHOULD TREAT THEM LIKE AN OPPORTUNITY, NOT AN IMPOSITION
When An Investigation Is Required
California employers are required by law to take reasonable measures to prevent discrimination and harassment in the workplace.
This standard applies to situations involving sexual harassment, workplace intimidation, violence and all other forms of discriminatory or harassing conduct.
The Fair Employment and Housing Act (“FEHA”), California’s primary antidiscrimination statute, states that the failure to take all reasonable steps to prevent discrimination and harassment constitutes an independent violation, in addition to any acts of harassment or discrimination found to have occurred.
California courts have held that conducting a prompt, thorough and objective investigation is among the “reasonable steps” required of employers in order to prevent such unlawful conduct from occurring. An investigation must be commenced promptly whenever an employee complains of harassment, even when the claim may seem implausible.
In addition, a written policy prohibiting unlawful harassment, discrimination and retaliation is required by law. The written policy must state the procedures the employer will utilize in connection to the required investigation.
In the event that a claim of discrimination or harassment is made, employers can expect the trier of fact, (usually a jury), to carefully examine the quality, promptness and objectivity of the employer’s investigation, as well as the compliance of its written policy.
Who Conducts Investigations?
The requirement that workplace investigations be objective and impartial means that, as a practical matter, the employer must engage a neutral third party expert, not employed or controlled by the employer, to conduct it.
Importantly, California law requires that the individual conducting the investigation be a licensed private investigator, unless he/she meets the limited exceptions set forth in the statute.
While attorneys can conduct the investigation if there is an existing attorney-client relationship with the employer and the investigation is within the attorney’s practice of law, human resources consultants are prohibited by law from conducting workplace investigations in California.
Generally speaking, employers are required to conduct an investigation promptly upon receiving notice that a complaint of discrimination, harassment or retaliation has been made, even if it is only done verbally and informally. Because the acts, statements and knowledge of supervisory employees are imputed to the employer under California law, notice to any supervisor triggers the employer’s duty to investigate.
Thus, it is imperative that all supervisor employees be aware of the importance of communicating any complaint, no matter how seemingly minor, to the company’s decisionmakers immediately. Otherwise, the employer will likely be defenseless to not only a future harassment claim, but to charges that it unlawfully failed to conduct the legallymandated investigation. A supervisor’s failure to actually notify his/her superiors is no defense.
What Is A Lawful Investigation?
California courts, in evaluating the legal adequacy of a workplace investigation, have considered the following factors:
- Was the investigation conducted by an unbiased, legally-qualified investigator;
- Whether the investigation was conducted objectively;
- Whether all relevant witnesses were carefully interviewed;
- Were all pertinent documents identified and carefully considered;
- Did the investigator thoroughly follow-up on the information revealed by witnesses and documents;
- Whether the investigator produced a fair and objective analysis of the evidence produced.
The investigation must include a good faith, impartial and thorough approach to resolving credibility issues when, as is typical, the parties give differing versions of pertinent events.
It is clearly insufficient, for example, for the investigator to simply conclude that, because the accuser and alleged harasser provide irreconcilable versions of events, the allegations could not be established.
Investigations have been found to be deficient when the investigator:
- Interviewed only two witnesses;
- Failed to take witness statements;
- Delayed the investigation, or otherwise failed to meet the “promptness” requirement;
- Allowed a supervisor to conduct the investigation instead of a labor law expert; and
- Failed to interview additional witnesses where doing so may have resolved the parties’ conflicting versions.
The Bottom Line
When it occurs, workplace harassment invariably worsens in severity over time. As a result, when a legally deficient workplace investigation exonerates the accused harasser, allowing him/her to remain in the workplace, the alleged victim is typically subjected to accelerating harassment, retaliation or worse.
If the employer is sued, after the employee is forced to quit or otherwise, its fate will usually depend on the quality of the employer’s investigation. If the jury concludes that the harassment occurred, and that a half-hearted or flawed investigation enabled the harasser to continue in his/her job and to resume making the claimant’s life miserable, the employer will likely be viewed as an active participant by enabling the harassing conduct.
In such a case, the size of the jury’s verdict will likely mirror its anger with the employer for not only ignoring its legal responsibility for protecting employees in the workplace, but for actually appearing to protect the harasser by neglecting its duty to conduct a competent investigation. This is especially true when the evidence shows that a diligent investigation would have supported the complaint, and resulted in the harasser’s removal from the workplace. In such an event, the employer could receive bad news in the millions.
Employers can avoid this nightmare by viewing the investigation requirement as an opportunity, rather than an imposition, and by conducting it accordingly.
This is because the initiation of a thorough investigation often provides a unique opportunity for the employer to develop powerful insights into not only the truth or falsity of the immediate complaint, but also into what really goes on in the workplace, such as the hidden conduct and power structures among employees that are not normally visible.
This can yield a candid and invaluable view of the actual conduct of the alleged harasser and other employees, in addition to other workplace issues, otherwise unknown to the employer, that can be addressed before they develop further.
What employer wouldn’t want to be aware of employees who, through embezzlement for example, are subjecting the company to the risk of insolvency for personal gain? Why would employers rationally respond any differently to employees who are creating identical risks by secretly abusing their co-workers?
The investigation process, if conducted properly, will enable the employer to fire a workplace harasser, while insulating it from legal claims that might otherwise be available to the fired employee. Simultaneously, the employer will gain the enhanced respect of the alleged victim, and the workforce generally, by responding forcefully to the complaint, and remedying the situation promptly.
While a lawsuit may still result, the employer’s demonstrated diligence will optimize its ability to defend a claim. A diligent investigation will, moreover, often nip a prospective lawsuit in the bud, as a result of the employer’s demonstration of good faith.
Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over three decades. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives.
While no one can guarantee a future free of lawsuits, Putnam has compiled a remarkable record of success: Not one employer-client has been sued in 36 years with his system of precautions in place.
For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well.
You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. www.jaygputnam.com/articles-by-jay-g-putnam/