Conducting an Internal Investigation

By: Paul Ebeltoft

How do you conduct an investigation?

Human Resource Professionals are the go-to personnel when your company is hit with an internal complaint of hostile work environment or discrimination. HR professionals know that the best way to protect the company is to act promptly, be thorough, be fair, learn what happened and take steps to correct and prevent any offensive condition.

So why am I writing an article about what you already know? The fact is that many HR professionals, while knowing how to conduct a good investigation, are sometimes settling for bad ones. There may be internal pressure to absolve the company from wrongdoing. There may be egos and jobs at stake. Investigations are always an imposition, taking away precious time from other vital projects. This article is to encourage you if your investigations have suffered and to congratulate you if they have not.

What does a bad investigation look like?

Of course, failing to conduct an investigation at all is the first step to leaving your employer at risk for damages. The second step on the road to disaster is delay. Other investigatory deficiencies are more subtle.

Consider the case of Castelluccio v. IBM, a Connecticut lawsuit that, to my knowledge, is still pounding its way through court. A little more than a year ago, though, a federal magistrate judge decided a motion in the matter, giving us a glimpse into what one federal court, at least, considers a bad investigation to look like.

James Castelluccio (Jim) was a forty-year employee and vice president of IBM. His boss, another VP, consistently rated Jim as a “solid contributor … reliable … [and demonstrating] appropriate … knowledge, skills, effectiveness and initiative.” Jim’s boss retired. He was replaced by a 50 year-old woman who, according to Jim, during their first face-to-face began the meeting by asking his age. Jim was then a few days shy of 60.

Six days later, Jim’s new boss sent an email to IBM HR saying “we need to replace Jim.” After some job shuffling, Jim was told that “he was eligible to bridge to retirement” and was offered a severance package. Jim didn’t want to retire and didn’t sign the offer. Instead he lodged an age discrimination complaint with IBM. HR started an “investigation” into the complaint. Seventeen days later he was terminated. About two months later, the investigation found that IBM had treated Jim fairly.

IBM announced its intention to introduce the HR investigation into evidence in Jim’s lawsuit to show the reasonableness of its investigation. Jim’s legal team made a motion to exclude it. The magistrate judge agreed with Jim finding that:

1. The report only contains the findings and conclusions of IBM, excluding Jim’s account of the circumstances surrounding his termination.
2. The investigation was not conducted by a neutral but by a person involved early in Jim’s situation with his new boss who chose whom to interview and what evidence to consider.
3. There was no hearing, no evidence offered, no sworn statements and no opportunity for Jim to respond to the criticisms leveled against him, let alone conduct direct or cross-examination of witnesses.
4. Favorable evidence, such as job evaluations, were not included in the report.
5. The report strayed from the complaint of age discrimination, concentrating instead on various executive’s views of Jim’s job performance.
6. The purpose of the investigation seemed to be to exonerate IBM, not to determine fair treatment. As evidence of this the court considered the statement of HR that, had Jim accepted the severance package, it would have discontinued the investigation. Had the purpose of the investigation been truly to determine whether Jim had been treated unfairly, HR should have let it be borne to its natural conclusion, the court said, regardless of whether Jim had decided to accept the severance.

The HR takeaway

Reading this litany of IBM’s investigatory shortcomings may cause some concern in small HR departments about the lack of “neutrals” to conduct the investigation or the lack of “hearings and cross examinations” in your company’s investigation protocol. I don’t mean to cause upset. I think that the case can be broken down into reasonable rules that all HR departments big or small can follow. These include:

1. Train personnel outside of the HR department to investigate complaints. Ask your company to authorize HR to assign investigations to these people if HR is already up-to-its-elbows in the matter.
2. Sometimes it is easier to assign the investigation to your lawyer or to an outside service. If you do, bear in mind that you must surrender complete control to the lawyer or independent, (or of your internal out-of-HR investigator, too). Failure to do so may simply make these another tainted tool of your company in the eyes of the court.
3. Don’t take short cuts. Track down everyone with knowledge and document their evidence. Use sworn statements if possible or recorded interviews. It is okay to fairly synopsize recorded interviews if you save the tapes to allow opposing counsel or the courts to fact-check your work.
4. Don’t enter the investigation with a bias. Let the facts take you where they lead.
5. Make sure that the complaining party has a chance to say his or her piece and to fairly respond to all charges.
6. Follow the trail to the end, regardless of whether the complaining party takes steps to release or ameliorate the complaint, fails to cooperate or even takes steps to escalate it, like filing an agency complaint.
7. Follow your policy procedures assiduously. Your policy may not be perfect but it is what you have. Changing the rules by which your company has operated for one investigation is not a good plan. You may consider adding rights for the complaining party during the course of an investigation after consulting with counsel concerning possible implications of not having done so for past complainants. Of course, if you discover policy gaps during the course of an investigation, you may change your policy going forward to address them provided the changes comply with basic fairness and law.

Our interest in serving you

My law firm’s goal is to give understandable information and to foster discussion about real-life issues facing human resource professionals. If we are not achieving that goal or if you would like us to address other employment law issues, please email me at pebeltoft@ndlaw.com We promise to take your comments and ideas to heart.

Disclaimers
(Otherwise known as “the fine print”)

I make a serious effort to be accurate in my writings. These articles are not exhaustive treatises, though, so do not consider them complete or authoritative. Providing this information to you does not create an attorney-client relationship with my firm or me. Do not act upon the contents of this or of any article on our homepage or consider it a replacement for professional advice.

Reprinted with permission from an article submitted for publication in the February, 2015 Southwest Area Human Resource Association newsletter.