A Global Perspective on Investigating Employee Misconduct

For many years now, U.S. employers have been grappling with the proliferation of cases involving employee misconduct. This behavior ranges from sexual, racial and other forms of discriminatory harassment to office bullying to workplace violence to retaliation. What many employers don’t realize is that when they investigate these allegations, it often results in a “choose your lawsuit” scenario. When the employer sides with the victim and terminates the wrongdoer, it faces the possibility of a wrongful termination lawsuit. When the employer sides with the accused, the accuser often goes running to a lawyer claiming ongoing harassment, retaliation or ostracism.

These problems are no longer the exclusive province of U.S.-based companies. Employers throughout the world are experiencing a rise in complaints of employee misconduct and are also finding that legal problems can result from how these matters are handled. Multinational companies, in particular, face the daunting task of figuring out how to create:

• A consistent and uniform standard of conduct
• A complaint procedure that can be used regardless of where an issue arises
• Investigative techniques that are commonly utilized from operation to operation

For global businesses, the place to start is by developing a code of conduct that applies worldwide to all employees, regardless of the jurisdiction where they work. Sophisticated employers understand that even where a jurisdiction does not forbid certain types of behavior, it doesn’t mean that behavior should be tolerated or condoned. For example, workplace bullying is only regulated in a few jurisdictions around the world such as Switzerland, Sweden, Germany, France, England and Quebec, Canada. Nevertheless, many human resource professionals are inundated with bullying complaints. Companies need to take a firm stand against this behavior even if it is not unlawful in the state or country where the issue arises. While many jurisdictions around the world do not outlaw sexual harassment or other forms of discriminatory harassment, this conduct should likewise be prohibited in a global employer’s code of conduct. The same goes for retaliatory behavior and forms of discrimination that might not be outlawed by a particular jurisdiction.

Global companies also need to develop a complaint and investigation procedure that is consistent from jurisdiction to jurisdiction. Employees should know exactly where a complaint should be lodged and management should understand who is responsible for investigating those complaints. It is not uncommon for employee complaints to go to the wrong person. For example: Should an HR professional really be responsible for investigating an environmental cover-up? Should corporate security be investigating a retaliation complaint? For that reason, companies should have a detailed procedure setting forth the different types of complaints that may arise and who is specifically responsible for handling them.

The investigative procedure itself must also be consistent. It is not uncommon for employees to claim negligence where they can demonstrate that had the complaint been handled in a different office, the outcome might have been different. Investigators need to be taught to employ a uniform standard of proof. Too often, human resource professionals and corporate security personnel bite off more than they can chew. They employ standards such as “beyond a reasonable doubt” or “clear and convincing evidence” when the law does not impose such a standard and where utilizing such a standard would be simply unrealistic.

For example, corporate security departments—often staffed by former police officers or FBI agents—wrongly assume that when they are investigating an internal complaint that could have criminal law implications, such as theft or assault, they are required to employ the “beyond a reasonable doubt” standard since that’s what the courts will use if the employee is ultimately prosecuted criminally. These individuals need to be educated about the fact that they should not impose such a stringent standard of proof when conducting an internal investigation.

Most courts in the U.S. and around the world that have addressed this issue have followed Cotran v. Rollins Hudig Hall International, Inc., 17 Cal. 4th 93; 69 Cal. Rptr. 2d 900 (1998). In that case, the California Supreme Court concluded that the standard of proof is one where the investigation was conducted in good faith—meaning that it was fair and objective—and where the conclusion reached was a reasonable one. As the court acknowledged, reasonable people can disagree on the results of an investigation and, in fact, reasonable people can sometimes make mistakes. Nevertheless, for purposes of addressing a legal challenge to the conclusion reached following an investigation, courts and labor tribunals are not supposed to second-guess conclusions. Their sole focus should be on whether the process that led to the conclusion was objective and reasonable. Company investigators need to understand that when employing the Cotran standard, it is not uncommon to conclude that an employee engaged in theft or some other act of dishonesty but, for a variety of reasons, that same employee cannot be successfully criminally prosecuted.

In light of this, every member of management who conducts investigations into employee misconduct must receive proper training. Those individuals should include: human resource professionals, corporate counsel, in-house security, ethics officers, auditors, and environmental safety and health professionals. These individuals need to be taught how to:

• Ask effective questions 
• Obtain meaningful information from the accuser and the accused 
• Deal with a reluctant witness 
• Assess credibility 
• Sort relevant from irrelevant evidence
• Arrive at a legally defensible conclusion

They also need to be taught how to understand and write an investigation report that accurately summarizes what the investigation entailed, what conclusions were reached and how they were reached. Many companies are nervous about having these conclusions put in writing for fear that the report might come back to haunt them in court. What they really need to understand, however, is that these reports are the best possible evidence demonstrating that they acted objectively and reasonably. If a company is concerned that an investigator’s report will be poorly written, that company should either get a new investigator or better educate that person about how to properly prepare these reports.

Investigators need to be taught the importance of using subjectivity in the process of making these determinations. No two witnesses are created equal. Some people have better hearing or eyesight. Some have agendas and others don’t. Some witnesses lack credibility because they have an ax to grind, while others like the limelight a little too much and have a tendency to embellish. This information must be factored into the equation in determining whether the information the witnesses supplied is believable. In a classic “he said, she said” dispute, investigators need to be taught how to explore what’s called “ill motive.” In other words, is there a genuine reason why the accuser might have made the story up? Did she accuse her boss of harassment because they had an affair that went sour? Or maybe he gave her a bad review or denied her a pay increase? These things need to be pursued aggressively.

Investigators also have to consider the demeanor of the interviewee. Did she seem nervous? Did she avoid eye contact when key questions were asked? Was he sweating profusely? Investigators need to be taught that these are legitimate issues to consider. But before they can be considered, they have to have a base line for comparison. In other words, investigators need to know how the person normally acts in similar situations. If the witness never looks people in the eye, then the fact that she avoided eye contact during the interview is irrelevant.

What should an HR professional do when she is investigating a complaint and lacks prior experience in having dealt with the interviewee? In such a situation, she either must conduct a long enough interview in order to determine whether the conduct in question is an anomaly or interview a sufficient number of witnesses to determine what the interviewee’s behavior is normally like.

The logic and consistency of an individual’s story also needs to be considered. Investigators need to trust their instincts and use common sense in determining whether it is reasonably likely that the person’s side of the story could have happened as claimed. Investigators also need to be taught how to uncover corroborating evidence, and they need to understand that corroborating evidence is not limited to what a witness might “hear.” They need to understand that a corroborating witness is anyone with firsthand knowledge—based on what they have seen, touched, tasted, heard or smelled. They also need to understand that corroborating evidence can come from sources other than witnesses, such as diaries, phone records, videotapes and the like.

Of course, company investigators lack subpoena power. So they have no way to legally compel a witness to provide hard evidence. Nevertheless, investigators have two techniques at their disposal. First, the investigator can create an incentive for the interviewee to cooperate. Where interviewees are made to understand that providing this evidence will either inure to their benefit or the benefit someone they are trying to protect or help, they are more likely to produce the evidence in question.

The second technique is a more heavy-handed approach and should only be used if the first option doesn’t work. Companies need to have within the code of conduct a policy mandating cooperation in investigations. Such a policy should say: “Failure or refusal to cooperate in or interference with a company investigation will be grounds for discipline up to and including termination.” With such a policy, reluctant witnesses should be informed that they put their job at risk by refusing to provide the investigator with the evidence. Once they’ve obtained this evidence, investigators need to be taught how to determine its authenticity.

Finally, company officials need to understand how to properly use the attorney-client privilege as part of the investigation process. Since many of these investigations result in litigation, investigators need to understand that the company’s legal counsel is the best possible sounding board for ideas, concerns or issues. Legal counsel should review the investigation report before it is signed, sealed and delivered. Legal counsel is the one place they can turn to “let their hair down” and have meaningful and open discussions and not have that information come back to haunt them in later litigation. If those communications and correspondence do occur, companies need to guard access to that information and documentation, or they risk waiving the privilege, resulting in allowing access to this highly confidential information.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.