Global Warning on Investigations

When U.S.-based companies encounter complaints of workplace wrongdoing at their foreign operations — such as sexual harassment, accounting fraud or bribery — the investigation may also fall within the purview of U.S. management.

Human resources personnel in the United States are well aware that complaints of workplace misconduct need to be thoroughly investigated to limit liability exposure. When conducting workplace investigations overseas, U.S. personnel may feel inclined to apply their familiar investigation strategies.

Yet, laws in other countries differ, and U.S. investigation protocols may need to be significantly modified to comply with the particular employment and data protection laws in that country. Failure to adapt these U.S. protocols to local requirements may trigger accusations that the company itself engaged in illegal activities during the investigation and could cause evidence gathered in the investigation to be excluded in a foreign lawsuit.

This does not mean that U.S. personnel will have to leave the investigation entirely up to local management, but U.S. personnel need to seek legal advice from competent counsel familiar with the local requirements in the specific country before starting the investigation. Many countries enacted laws addressing workplace conduct and protection against discrimination or harassment.

Some of these laws also specify the procedures by which workplace investigations need to be conducted within that country’s legal framework; these requirements may include setting up an investigation committee composed of employees and management personnel. Similarly, several European countries have particular legal standards that must be followed during a workplace investigation.

For instance, if an investigation may possibly lead to disciplinary action against an employee, the individual is entitled to certain legal safeguards, such as the right to advance notice of the investigation and being entitled to representation (or being accompanied by a peer). The company may need to engage the works council or local union leadership, and employees may be entitled to view the records and company documents prepared during and after the investigation.

Thus, cross-border workplace investigations can pose complex legal issues for U.S.-based personnel. While each country has peculiar requirements, there are some guiding principles that one can follow to conduct the workplace investigation overseas. A preliminary step may be to implement a corporate code of conduct prohibiting behavior considered wrongful or illegal, hopefully reducing the risk that workplace misconduct occurs in the first place.

Such a code may contain express provisions on how workplace investigations will be handled. Corporate policies may also call for setting up a dedicated complaint hotline to elicit allegations of wrongdoing. Keep in mind that laws dealing with employee hotlines are surprisingly complex in foreign countries, and U.S. companies should first request legal advice before launching a hotline in another country.

Countries such as Germany and the Netherlands require the company to consult with employees before launching the hotline, and Belgium, France and Spain may require the company to notify the respective government agency that a hotline will be implemented (and may even require government approval).

An investigation into workplace misconduct will inevitably identify employees who are victims, wrongdoers or witnesses. When collecting evidence, U.S. companies routinely review the employee desks and files for relevant information.

The employee’s computer files and company email accounts are generally fair game in the United States, and there are no restrictions on who can be interviewed or whether the investigation team can view personal files and other documents in the company’s possession. In cross-border investigations, however, access to such data and files will be more restricted. Foreign data privacy laws are among the greatest challenges for conducting cross-border investigations because they restrict the kind of data that can be collected and transferred out of the country.

Many countries recognize a fundamental legal right to privacy of one’s personal data, which can even apply to one’s data contained on the employer’s information technology systems or computers. In light of these stringent data protection laws, U.S. personnel’s access to employee data may be severely limited and the company will first need to create appropriate channels to permit access to personal data or transmit such data to the United States.

For investigations by U.S.-based personnel conducted in Europe, any transmittal of personal data will need to be done in accordance with local data protection laws and additionally with the safe harbor rules, model contractual clauses or binding corporate rules. These legally compliant transmittal channels take time to establish and need to be in place before the investigation commences. Data protection laws in foreign countries may also require the disclosure of investigation notes and files to the target or witnesses.

In many countries employees enjoy a broad right to access data and employer-maintained documents that identify them, and employees may request deletion or rectification of those documents or their personal data contained therein. Targets of the investigation may also have a right to be notified of the fact that they are being investigated as soon as there is no substantial risk anymore that this notice would jeopardize the investigation.

Therefore, in planning the investigation, management must strike a balance between maintaining the confidentiality of the investigation and the employees’ legal rights under the data protection laws, especially a target’s right to access the investigation files.

Bernhard Mueller is a shareholder and member of the Ogletree Deakins’ Immigration and International practice groups resident in the firm’s Columbia, South Carolina, office. Hendrik Muschal is the managing shareholder of the firm’s Berlin office and a member of the firm’s International Practice Group. Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.