Do You See What I See?

Upsurge in Investigations Is A Direct Result of the Economy

One of the advantages of being an outsourced consultant with clients in various industries is that I have a “big picture” perspective that few in-house counsel or human resource professionals are able to see. What do I see?

There is a major upsurge in the number of employee misconduct investigations that I am being asked to conduct or guide my clients through. I have not conducted a formal study on this, of course, but I have theories about this upsurge.

In a good economy, employers worry less about wrongful termination lawsuits because employees who have been terminated or leave disgruntled will often, simply, move on to find a better fit at another company. In this economy, however, the employer must acknowledge that employees are fighting for their jobs because finding another one is much harder than it has ever been. Therefore, the need to conduct a fair investigation before terminating an employee for cause is essential to protect against a claim of wrongful termination.

Or another interrelated theory is that this upsurge is a result of the number of plaintiffs’ attorneys, also fighting for new clients, who are willing to take these cases on contingency. Again, the fair investigation will help deter a plaintiff’s lawyer from taking a weak case to begin with.

Fortunately, the law is on our side. According to the California Supreme Court, upon receipt of complaints about an employee, an employer can terminate that employee for cause when it acts "in good faith and bases its decision on an honest assessment of the facts after an appropriate investigation. Cotran v. Rollins Hudig Hall International, Inc. 17 Cal. 4th 93 (1998). Cotran made the employer's requirment clear. To protect itself from a plaintiff's successful suit for wrongful termination, the employer must have only conducted a fair, impartial investigation. It didn't have to be right, without the benefit of hindsight, in its finding of wrongdoing.

There are a number of proactive strategies that you can put into practice in order to adequately prepare for an investigation. First, have a clear investigation protocol policy. Second, train your managers and human resources to intake complaints correctly. Third, train your human resources to conduct the investigation or outsource the investigation to a trained investigator. Last, have an employment attorney on call to discuss potential litigation. It is appropriate to call in an "outside investigator" when 1) the person being investigated is in a high ranking position, 2) no one has been trained to conduct investigations in house, 3) someone in Human Resources is being accused of wrongdoing or 4) you are just too busy to devote all your attention and time tothis time-sensitive matter.

Choosing the right investigator is imperative. Remember, the investigation may serve as your company’s defense to a claim of wrongful termination. In selecting the investigator consider whether this person has the experience and credibility to withstand scrutiny after the fact. The investigator does not have to be an attorney, but he or she should be well versed in the intricacies of employment law to navigate the legal nuances throughout the investigation. If the investigator is an attorney, always remember to treat all conversations with an outside investigator/ attorney as if they are NOT covered by attorney-client privilege, as it may be waived in future litigation. Discuss confidentialities with your employment law litigator. Also, ensure that your litigator and your investigator are not the same person so as to protect against conflicts of interests. Last, ensure that your investigator has the experience and time to afford the investigation as time is a consideration by courts. Investigations must be fair to both parties and be thorough. An investigation that takes too long due to the investigator’s schedule may be considered a burden to the person being investigated. Therefore, ensure that your investigator understands that time is of the essence in conducting the investigation.

Now that you can see what I see, recognize that the few proactive steps that you can take in anticipation of a lawsuit will help you prevent it.