December 15, 2017

Some thoughts on conducting effective workplace investigations

Posted in Corporate Litigation, Employment Law by Gene Killian |

One of the interesting things about being a policyholder-side insurance coverage lawyer is that I get to pick apart train wrecks after they happen, and try to figure out what caused them.  Often (as with train wrecks) it’s human error at some level.

If an engineer makes bad decisions, the train goes off the rails. And if you’re conducting an internal investigation and make bad decisions, the same thing happens.  So:  How do you avoid making bad decisions?  I’m glad you asked.   I’m not going to give you another lengthy “how to conduct an internal investigation” article (there are plenty of those out there), but I’d like to point out a few recurring issues that I’ve seen over the years.

First, who should conduct the investigation? Law firms will tell you, “Law firms, of course!”  (Follow the money.)  And using outside counsel does have the benefit of being more likely to shield your investigation results with the attorney-client privilege.  But is (expensive) outside counsel always the best way to go? That depends on the purpose of your investigation.

If the purpose of the investigation is to collect information and figure out what actually happened, your outside law firm may not always be the best option, especially in non-bet-the-company matters.  You might be better off with outside HR professionals who are skilled at questioning well, or your in-house HR person. People don’t trust lawyers, and sometimes, they clam up as a result.  Example:  A few years back, I was conducting an investigation of a whistleblower issue. The employee who raised the issue was relatively young and inexperienced in business, and was consumed with the idea that I was trying to set her up somehow. (I wasn’t.) I guess she’d seen too many TV lawyer shows, because her paranoia eventually focused on my cell phone, and she accused me of trying to record our conversation without telling her. (I wasn’t.) I solved that issue by powering off the phone and putting it on a desk outside of the conference room. At that point, she seemed to calm down and eventually I got the information we needed, but it was a struggle.

Even good questioners can run into trouble, of course.  We once assisted a defense contractor with an insurance claim relating to apparent vandalism of some machinery destined for the military. The client brought in former FBI agents, who interviewed everyone at the plant. They got no useful information. It was an interesting claim, and I sometimes wonder whether the intimidation factor caused people who knew things to “un-know” them.

If you do use outside counsel, here are a few suggestions. Consider having a nonlawyer with a calm demeanor (like someone good from HR) in the room during the interviews.  There are a number of reasons for this, but the main one is to try to take the edge off meeting with a lawyer. If the lawyer is a male, try to make his or her partner a female, especially if the complainant is a female. A small bit of diversity can help relax the proceedings so that you can get the information you need.  Keep in mind also that a lot of lawyers stop learning when they graduate from law school (sad to say, but true) and are terrible at asking questions and getting information. (Read just about any deposition transcript. Ugh.)  Be sure that you ask who in the firm will be conducting the investigation, and have a conversation with that person.  Is he or she easy to talk with? That’s what you want.  And when the questioning happens, make clear to the witness that the lawyer represents the company, not the complaining employee or the target of the investigation.  

Second, act quickly, but not hastily. I once had a boss who was obsessed with what he called “Instant Law.”  When a client asked a question, my boss didn’t want to know about necessary research or sub-issues.  He wanted to get the client an answer THAT DAY.  I guess that’s admirable from a client service perspective, but it leads to a lot of “Ready, Fire, Aim!” scenarios.  Not good when it comes to getting things right in a situation that may be tense. Yes, you need to act promptly.  But as another of my bosses once told me, “Instant law is good, but correct law is better.”  You get the point.

Remember, a good investigation can prevent a lawsuit by resolving worker complaints in-house — but if a company is hit with a suit, the quality of its internal investigation can make or break its case.  Don’t sit there, stagnant, when a complaint comes in, but take your time reviewing the necessary documents and interviewing the necessary witness properly before you make a decision.   This can be difficult, because the employees involved in the situation may start badgering you. (In fact, they WILL start badgering you.) Stand your ground.

(Also, be sure you take appropriate and immediate steps to preserve all evidence.  You don’t want key e-mails disappearing, for example, because of your standard document destruction procedures.) 

Third and finally, once you have all the facts, use an appropriate framework to reach your decision.  There is no “one size fits all” for that. But there’s a great little book by Larry Donnithorne called “The West Point Way of Leadership,” which is required reading at our firm. It’s not what you’d expect (“rah rah” military stuff), but a series of observations by a Vietnam veteran and college president about effective leadership and making ethical decisions. Donnithorne recommends a decision-making framework for moral or ethical issues as follows:

  1. What are the relevant facts of the situation?
  2. What are the alternative actions available?
  3. Who will be affected?
  4. What moral principles are involved?
  5. How would these principles be advanced or violated by each alternative action?

Then, communicate your results to the people involved.  Show empathy to the complainant even if his or her position is not accepted. You might be able to do this by simple conciliatory measures, such as suggesting to the employee a move to another department that might be a better fit, or a shift change, for example.

Handling an investigation well is a key component of risk management.  It can stop lawsuits before they happen.