Mcle Self-study: This Is Not Your Father's (or Mother's) Investigation: How Workplace Investigations Have Changed Over the Past 10 Years

• Publication year: 2014
• Author: By Susan Woolley and Michael A. Robbins

MCLE Self-Study: This Is Not Your Father's (or Mother's) Investigation: How Workplace Investigations Have Changed Over the Past 10 Years

By Susan Woolley and Michael A. Robbins

Susan Woolley has practiced law for 25 years and has extensive experience with discrimination, harassment, and retaliation investigations. She served as an expert and consultant to the U.S. Department of Justice Civil Rights Division and was appointed by the Los Angeles County Board of Supervisors to the Equity Oversight Panel which reviews and evaluates workplace investigations conducted countywide. Ms. Woolley is an adjunct professor at Loyola Law School, where she teaches Fact Investigation. Michael Robbins is President of EXTTI Incorporated, which provides expert testimony, training, and investigation services in employment matters. Michael has conducted and/ or supervised well over 500 workplace investigations, and has served as an expert witness in nearly 500 cases. Prior to forming EXTTI, he practiced employment law for 20 years. He is the President of the Association of Workplace Investigators (AWI).

INTRODUCTION

Employers have been conducting workplace investigations for decades. However, as laws have changed and as courts have provided greater scrutiny of workplace investigations, how investigations are conducted has changed as well. This article addresses many of the developments that have occurred over the past decade.

CHANGES IN THE LAW

A little over a decade ago, the California Legislature added provisions to the California Fair Employment and Housing Act (FEHA)¹ requiring employers to take reasonable steps to prevent discrimination and harassment.

Specifically, California Government Code section 12940(j)(1) states, "[a]n entity shall take all reasonable steps to prevent harassment from occurring." Similarly, California Government Code section 12940(k) states that it is a violation of FEHA "[f]or an employer . . . to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring." The failure to take such reasonable steps is an independent violation of the Act, but only if the underlying harassment, discrimination, or retaliation is found to have occurred.²

Interpreting these newer provisions, courts have held that conducting a proper workplace investigation is one of the "reasonable steps" necessary to prevent harassment, discrimination, and retaliation from occurring.³ For example, in Northrop Grumman Corporation v. WCAB, the California Court of Appeal stated, "[t]he employer's duty to prevent harassment and discrimination is affirmative and mandatory. . . . Prompt investigation of a discrimination claim is a necessary step by which an employer meets its obligation to ensure a discrimination-free work environment."⁴

The result of Northrop Grumman and other decisions was to put workplace investigation issues squarely before the trier of fact. However, additional legal developments compelled this as well. For example, the U.S. Supreme Court's decisions in Burlington Industries, Inc. v. Ellerth⁵ and Faragher v. City of Boca Raton⁶ created a limited affirmative defense (under federal law) in circumstances in which the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior.⁷

However, if the employer defends under Ellerth and Faragher, the

employer's failure to investigate can undermine both prongs of the affirmative defense: (1) A fact finder may decline to conclude that the employer "exercised reasonable care to prevent and correct [ harassment] promptly", if the employer fails to investigate any report of harassment; and (2) Where an employer is known to be reluctant to investigate, it has more difficulty showing that the complainant "unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to otherwise avoid harm."⁸

This affirmative defense also placed issues concerning workplace investigations before the judge or jury.

In Cotran v. Rollins Hudig Hall International, Inc., the California Supreme Court held that, at least as to at-will employees terminated for misconduct, as long as the employer conducted an adequate investigation into the misconduct allegations and reached reasonable conclusions as a result of the investigation, the jury's role is not to second-guess the employer's decision to terminate the employee.⁹ So, the Cotran decision also put workplace investigations into contention in employment-related litigation.

For all of the above reasons, there has been greater judicial scrutiny of workplace investigations. This increased scrutiny necessitated changes in the way investigations are conducted both when litigation is anticipated and when it is not.

CHANGES AT THE BEGINNING OF THE INVESTIGATION

Investigation by Defense Counsel

In the past, it was common for an employer's regular defense counsel to be hired to conduct any workplace investigations needed by the employer. However, this practice can give rise to a conflict between an attorney's duty of loyalty to his or her clients (and the related duty to vigorously defend clients) and the requirement that a workplace investigation be an impartial one. For example, in its Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors (Guidance), the Equal Employment Opportunity Commission (EEOC) says: "An employer should set up a mechanism for a prompt, thorough, and impartial investigation into alleged harassment." [Emphasis added].¹⁰

Writing in Advising California Employers and Employees, Patricia Perez (a former Commissioner with the California Department of Fair Employment and Housing) explains, "[w]hen an employment attorney is asked to perform an investigation on behalf of the client, it is very important to remember that the attorney's role is of a neutral fact-finder, not of a zealous advocate for one side or the other."¹¹ Similarly, the Association of Workplace Investigators (AWI) says in its Guiding Principles for Conducting Workplace Investigations (2012) (Guiding Principles), "[a]n outside attorney investigator conducting an impartial investigation should appreciate the distinction between the role of impartial investigator and that of advocate."

As a result, over the past few years it has become much less common to find an employer's regular defense counsel conducting workplace investigations for their client. However, there is another reason for this as well.

Workplace investigations have played an increasingly important part in employment-related trials. Plaintiffs' counsel commonly calls the investigator as an adverse witness to show the poor quality of the investigation. Conversely, when the investigation has been adequate, the employer may call the investigator to testify as to the good quality of the investigation. An obvious conflict is presented when defense counsel has both conducted the investigation and is defending the employer in litigation that concerns the investigation. Defense counsel might well have to testify as a witness about his or her own investigation, while defending the employer in the litigation concerning that investigation. Although such testimony is permitted under California Rules of Professional Conduct, Rule 5-210 (as long as there is written informed consent), it is not advisable.

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Yet another reason that regular defense counsel increasingly do not conduct workplace investigations is because it may create a perception of a bias. As AWI says in its Guiding Principles, "[w]henever possible, the investigator should be someone who is in fact, and who is perceived by the participants to be, impartial." This perception is not only important within the workplace, but also before the jury. That is, the trier of fact may well believe that an investigation conducted by regular defense counsel was not impartial.

Business and Professions Code Issues

Until recently, individuals acting as outside workplace investigators may not have been conversant with the requirements of California Business and Professions Code sections 7520 et seq. In general, the Code requires that all individuals conducting workplace investigations in California be licensed private investigators, or that the individuals meet an exception under the Code. One exception to the licensing requirement exists for "[a]n attorney at law in performing his or her duties as an attorney at law."¹²

In the past, attorneys may have assumed that, because they were attorneys, they met the exception. In fact, it was not uncommon for attorneys conducting workplace investigations to specify in their retainer agreements that they were not performing services as an attorney, thus ignoring the requirement that the attorney be "performing his or her duties as an attorney at law."

Two Attorney General Opinions provide insight in this area. According to the Attorney General, to come within the exception, investigations must be conducted pursuant to an attorney-client relationship.¹³ Further, the services rendered must have some connection to the attorney's practice of law, such that the attorney is performing services usually performed by an attorney in the practice of law.¹⁴

The many implications of these requirements are well beyond the scope of this article. However, no longer is it enough for an investigator simply to be an attorney. Instead, the attorney/investigator must be performing at least limited legal services, and an attorney-client relationship must exist between the attorney/investigator and the employer.¹⁵

There is yet another implication to the Business and Professions Code's investigation requirements. Although outside human resource consultants once commonly performed workplace investigations, the Code does not allow this. Specifically, outside (as opposed to in-house) human resource consultants who are neither attorneys nor private investigators (and who are not directly supervised or directed by either), are not...