Who should conduct internal workplace investigations?

July 13, 2007

Excerpted from New York Employment Law Letter, written by attorneys at the law firm of Epstein Becker & Green, P.C.

When an employee has filed a discrimination or harassment complaint that needs to be investigated immediately, who's the best person for the job?

Whether it's someone internally or from outside the company, there are many factors to consider in determining who will conduct the most expeditious, thorough, and efficient investigation — and one that will be least likely to result in future litigation.

This article discusses the desired attributes of the ideal investigator along with the advantages and disadvantages of in-house and outside candidates.

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Characteristics of the investigator
The investigator should possess exceptional interpersonal skills, be perceived as neutral and fair, and be a good listener. In addition, she should be detail-oriented and willing to press for details. She also should have knowledge of the company and its operations and a working knowledge of discrimination and other laws affecting the workplace.

Prior investigative experience and knowledge of investigative techniques are highly recommended. Finally, the investigator should have the ability to act as a credible witness, be in a position to maintain confidentiality, and -- if she is an internal employee -- have the likelihood of continued employment with the company.

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Potential candidates
Commonly used investigators include HR personnel, internal security, and non-lawyer third-party investigators. Lawyers, either outside counsel or in-house counsel, conduct investigations into workplace complaints as well. The advantages and disadvantages of using each of those persons as an investigator are discussed in detail below.

HR personnel. HR personnel are frequently used to investigate workplace complaints because most employees perceive them as objective and nonthreatening. That's because HR personnel ideally have superior interpersonal skills that enable employees to feel comfortable confiding in them when they're confronted with a problem in the workplace.

In fact, in many large companies, one of the functions of the HR department is to conduct investigations into employee complaints. In those situations, HR personnel make superior investigators because of their prior experiences investigating similar complaints within the company. Also, the HR department is usually the most familiar with the business itself and its employees.

There are, however, some disadvantages associated with choosing an investigator from the HR department. For example, the complaint being investigated may "hit too close to home" for an internal employee to maintain impartiality.

Similarly, in certain circumstances, employees may be uncomfortable voicing their complaints to HR personnel if they feel the HR department is so closely linked to the company and its management that they wouldn't be able to maintain impartiality as investigators.

But because of their unique job training, which often includes specific training on how to conduct an internal workplace investigation and remain impartial, HR personnel are often the ideal choice to head up the investigation.

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Internal security. Another in-house option for conducting the investigation is a member of internal security. Using security personnel is advantageous because they often have investigation experience and typically exhibit a more assertive investigation demeanor than, for instance, someone in HR.

Sometimes security personnel have been trained in investigation methods that enable them to obtain information from alternative sources that may be overlooked by a lesser-skilled investigator.

There are, however, several disadvantages to using security personnel to conduct t workplace investigations. First, because of their occupation, security personnel may be viewed as intimidating. Their approach may be too aggressive or inquisitorial to be productive.

Second, some of the methods a security personnel investigator uses to obtain information about the complaint could come from unreliable sources that may not be admissible in court.

Nonlawyer third-party investigators. Nonlawyer third-party investigators bring objectivity to an internal workplace investigation that internal employees and in-house counsel may lack. Organizations sometimes use former or retired employees to conduct investigations into workplace complaints because of their knowledge of the business and its employees.

Other times, actual investigators are hired to conduct the investigation because they have a broader knowledge of investigatory methods and techniques than HR or security personnel.

In the past, a major disadvantage associated with using outside investigators emanated from statutory restrictions on an employer's ability to anonymously obtain certain information about an employee who was the subject of a complaint.

For example, up until 2003, the Fair Credit Reporting Act of 1970 (FCRA) and the Consumer Credit Reporting Act of 1996 precluded companies seeking to use third-party investigators from maintaining anonymity in the investigation of employee complaints.

Those statutes required that notice be given to the employee under investigation, that the employee consent to have his credit report disclosed to the investigator, and that the findings of the investigation be disclosed to the employee upon completion of the investigation.

Employers, feeling that their inability to conduct anonymous investigations into their employees was thwarted by that legislation, lobbied for a change. On December 4, 2003, President George W. Bush signed into law the Fair and Accurate Credit Transactions Act, which reauthorizes and amends the FCRA by exempting third-party investigations of alleged employee misconduct from its notice, consent, and disclosure mandate.

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Counsel investigators. When lawyers, both in-house and outside, act as internal investigators, ethical and privilege issues may arise. Lawyer-investigators should always disclose the purpose of the investigation and the nature of the attorney's and company's relationship to witnesses. Specifically, lawyers should always disclose to witnesses that the company, not the accused employee, is the attorney's client.

Outside counsel, like the nonlawyer third-party investigator, bring objectivity to an investigation, which is essential in situations in which the allegations are too sensitive for an employee-investigator to be objective, such as when a high-level executive is accused of harassment.

What outside counsel gain in objectivity, however, they lack in the areas of knowledge of the organization, its culture, and its employees.

In-house counselors are well suited for the job of investigator because of their knowledge of employment laws, the company, the corporate culture, and the employees. Furthermore, in-house counsel benefits from the attorney-client privilege.

Unfortunately, that privilege is likely waived when an employer asserts the defense that it exercised reasonableness in conducting a prompt and thorough investigation into a complaint.

Whether in-house or outside counsel, lawyer-investigators are sometimes perceived by complaining employees as intimidating, which could prevent them and other witnesses from being completely forthright and honest.

Solution: Use a team
There's no reason to assume that an employer has to choose one person to investigate an employee complaint. In fact, if an employer has the necessary resources, using a team consisting of, for example, an outside attorney and an HR employee is often particularly effective.

The team approach also offers the essential element of corroboration should the complaining employee, the accused, or a witness alter her earlier statements.

Copyright 2007 M. Lee Smith Publishers LLC. This article is an excerpt from NEW YORK EMPLOYMENT LAW LETTER. NEW YORK EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in New York employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.

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