While employers strive to prevent workplace conflict, complaints about employee conduct may still arise. When the complaint involves discrimination or other unlawful conduct, it is important for the employer to thoroughly investigate the complaint and take appropriate action if the complaint is substantiated.
To manage these investigations, some employers rely on their in-house counsel. However, in-house counsel should not be the first line of defense when investigating an employee complaint, as counsel can become a trial witness and all documents not otherwise protected by attorney-client privilege are discoverable. This includes notes by counsel about discussions with employees during the investigation – notes most employers would rather keep to themselves.
Employers can be sanctioned for failure to turn over the investigation notes prepared by an in-house counsel or regular counsel who conducts an internal investigation. In EEOC et al. v. Spitzer et al, filed in the U.S. District Court of the Northern District of Ohio, the court ordered a mistrial after it was discovered the employer failed to produce the investigation notes of the attorney who conducted the internal workplace investigation into the plaintiff-employees’ complaints of discrimination, harassment and retaliation. The plaintiffs filed a motion for sanctions seeking attorneys’ fees and costs. The trial judge agreed and ordered the employer to pay more than $300,000 in fees to the plaintiffs. The trial judge referred to the conflict of interest that occurs when an employer uses regular counsel to conduct the investigation. Because the investigation can form the basis for an employer’s affirmative defense that it took appropriate action, the attorney who investigated the complaint can become a fact witness at trial.
Under most states’ rules of professional conduct, including Virginia's, an attorney should not engage in conduct which creates a conflict of interest, including the possibility that the attorney could become a trial witness in litigation where the attorney represents the employer. In-house counsel who conducts an investigation also can become a trial witness. Despite the privileged nature of attorney-client communications, an in-house counsel’s communications with non-managerial employees receive no such protection.
As a result, any discussions with employees outside the employer’s “control group” may be discoverable including anything in-house counsel asked, commented on, questioned, responded to, or otherwise discussed with non-managerial employees during an investigation. A good plaintiff’s attorney will take advantage of this possibility, especially if mistakes were made, notes were improperly withheld, or things were said by counsel that become challenging for the defense.
Guidelines for Conducting Internal Investigations
Because in-house counsel represents the employer, it is important to follow certain guidelines when conducting internal investigations. Below are a few tips that all employers should keep in mind.
- Never have an in-house counsel actually conduct the investigation. The attorney can advise in his or her capacity as counsel for the employer and should stay abreast of the investigation at all times. But the investigation itself should be conducted by trained HR personnel or outside consultants.
- For the same reasons, regular counsel should avoid conducting the investigation unless there is no anticipation that counsel will be representing the employer in subsequent litigation. Just as in-house counsel can advise, so can and should regular counsel.
- The employer should ensure HR personnel are specifically trained for conducting internal investigations. Keep in mind the content of the training is discoverable in many instances – even if conducted by in-house counsel. On the other hand, much of the background aspects of the training process, decision-making and preparation of the training are arguably privileged when done by in-house counsel at the management level or regular counsel.
- Members of the employer’s control group should closely supervise the investigation. Those individuals can and should advise in-house counsel on the progress of the investigation. This allows counsel to provide ongoing legal guidance on behalf of the employer without generating a conflict.
- The decision-making process should be handled at the management level, including any remedial actions to be taken by the employer, so that communications with counsel remain privileged. Of course, management’s communications with outside counsel are protected by the attorney-client privilege.
Much more goes into an effective workplace investigation, but if an employer begins with these basic guidelines the investigation will have stronger impact at trial. It is also advisable to consult an employment lawyer to ensure proper anti-discrimination training and investigation policies and procedures are in place.
If an employer is uncertain whether its current policies and practices meet the standards for invoking the “Faragher/Ellerth” defense, an audit can be helpful. An audit can save litigation costs in the future and significantly reduce the risk of an improper investigation. Nothing replaces strongly enforced anti-discrimination in the workplace, but these guidelines can bolster anti-discrimination policies and help prevent a complaint from spiraling into a lawsuit.