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Ten Practical and “Street-Smart” Rules for Conducting Internal Workplace Investigations

by paulfalconehr.com on December 18, 2013

There are a number of important strategies for conducting effective workplace investigations. Unfortunately many organizations lose sight of the fundamentals before moving to termination, only to learn in the post-termination litigation process that they failed to conduct a thorough investigation and give due consideration to certain key facts in the case. So before you allow members of your human resources team to launch an internal investigation, first start with this overview to ensure that everyone’s on the same page—both philosophically and logistically—when it comes to the fundamentals of conducting effective and thorough workplace investigations.

investigationsRule 1: It’s All About the Record

What so many well-intentioned employers forget is how a court or arbitrator might interpret their companies’ actions. As a general rule, think of this mantra when approaching internal investigations: “I don’t mind being sued . . . I just want to make sure that I’m getting sued on my terms, not theirs.” Getting sued is the cost of doing business in corporate America from time to time. But getting sued “on your terms” makes the difference between a “nuisance claim” and a seven-figure, punitive damages lawsuit that may need to be disclosed in your company’s annual financial statements.

If your company is ever in a situation where they appear to be rushing to the finish line to fire someone, slow down the process and make sure that you’ve got the appropriate paper record in place first. That may mean that you need to delay the termination decision, of course, but once you create a record that you’re confident you could successfully defend, then you’ll be fully prepared for any post-termination litigation that may come your way. Here’s an example: A branch manager at your bank is AWOL often. He has very little communication with his team, his direct reports engage in all sorts of gossip and blame, the branch’s production is the lowest in the region, and the staff turnover is the highest. One day the regional manager visits the branch unannounced and finds a significant degree of dysfunction at hand: customers waiting excessive periods of time to be helped, teller windows unmanned, and an overly argumentative and condescending “customer service” style that is totally unacceptable and contrary to both the letter and spirit of your policies.

The regional manager’s first reaction may be to fire this individual: the branch’s performance problems have been evident for over a year, the turnover creates ongoing challenges, and the branch manager’s reputation as someone who avoids confrontation and communicates very little is plain and evident to the visiting regional manager. This “last straw” event, however, is countered by the following fact pattern: this branch manager has been with the company for four years, is over forty, diverse, and has an open intermittent FMLA claim. Is it time to pull the proverbial plug based on the first impressions of this one visit (no matter how bad things may seem to be)? Probably not—while the visit certainly gives evidence to the ongoing problems with this particular branch, the record that’s currently in place won’t necessarily withstand legal scrutiny: the branch manager hasn’t been written up in the past year, last year’s performance review showed that he “met expectations,” and the individual hasn’t ever been placed on any kind of notice that his substandard job performance is placing his position in immediate jeopardy of being lost.

If termination arguably isn’t “sustainable” in your opinion based on the employment record on file at this point in time, place the individual on some form of documented corrective action that corresponds to the level of severity of the offense (e.g., written warning or final written warning). In your document, you can “throw the kitchen sink” at the individual by placing him on notice regarding multiple problems that you’re aware of: poor branch production, excessive turnover, lack of leadership and communication, poor exit interview results, and the like

The bottom line: With appropriate corrective action in place, you’ll have much more discretion as an employer to reset expectations, demand an immediate turnaround in multiple areas, or move to termination in the near future should the individual not demonstrate immediate and sustained improvement. While the regional manager may not be happy that this individual wasn’t terminated outright, that regional manager will arguably support your recommendation because you now at least have a plan in place for dealing with future infractions. Oh, and don’t forget that when next year’s annual performance evaluation comes along, this individual’s “overall grade” should reflect these ongoing problems and demonstrate that he didn’t meet expectations for the review period. (That ensures consistency between your corrective action measures and the annual performance review.)

Rule 2: Practice Trumps Policy

Don’t get too lost in what your handbook or policy and procedure manual tells you that you may do in specific instances. Generally speaking, you have to look at the “totality of events” involved in any give situation and to your organization’s past practices. For example, if a supervisor complains to you that a team member told him to “f- off,” your first reaction might be to terminate that individual—no questions asked. But what if the manager used that very same terminology on the employee first? Would you still argue that the subordinate should be fired? Or should they both be fired? And what if everyone on the team uses that expression as a term for kidding around with one another: is it justifiable to take one instance in isolation and then terminate someone for gross insubordination?

The lesson is that you’ve got to look to how you’ve handled similar situations in the past. Looking at any one event in isolation—no matter how egregious—could show that you didn’t do your homework before reaching a conclusion about the case. Remember that there are two sides to every story, and acting on only one side may leave your company vulnerable and exposed when it comes time to explain the rationale behind your final decision to terminate in light of the incomplete investigation that you conducted (or so reasons the EEOC or plaintiff attorney)

The same goes for tardiness: A supervisor can’t hold one person on the team more accountable to the tardiness standard than others. If everyone meanders in the door around 8:05 to begin work every morning, then terminating John Doe for violating that standard just because the employee handbook allows you to would not be a particularly wise move on your company’s part. Again, bear in mind that the policy is there as a guideline, but it’s only as valuable as how consistently it’s enforced across the board.

Rule 3: Always the Get the Accused Worker’s Side of the Story Before Making a Final Decision

The profanity example above demonstrates that violating a rule shouldn’t automatically trigger a company reaction without considering how that rule is generally applied to all others. Line managers will often insist that a termination decision be made without asking for the accused person’s input: “It doesn’t matter what they say—there’s nothing they can say to undo the damage that was done” goes their logic. And that may be true—but you won’t know until you ask.

Let’s assume it was reported that $200 in cash was missing from the petty cash safe. The video camera footage reveals that the branch manager took this money last night at the close of his shift. You clearly can’t terminate at that point strictly based on the video footage: while taking money without authorization is tantamount to theft, and theft is a summary offense (meaning that it’s not subject to corrective action—you’re terminated for a first offense), you have an obligation to hear the individual’s side of the story. What if the employee admits it and states that his regional manager gave him prior authorization to take the cash to buy office supplies: would that be a terminable offense? What if the employee admits that he took the funds but states that he only needed it overnight to buy milk and sundry items for his baby? In fact, he put an I-O-U note in the safe stating that if anyone opened up the safe that night, there would be $200 missing that he would promptly return it in the morning before the branch opens up. Is that a terminable offense?

The point is, you can’t know if there were any extenuating circumstances unless and until you ask. If the individual in the example above left an I-O-U note, you would probably still move to termination. But at least you’d have a better understanding of his motives and would be more informed about your recommendation. In short, you should always learn both sides of the story before moving to termination. That’s a fundamental element of workplace due process, and it’s a fair and objective practice that doesn’t limit your discretion in any way—it simply helps you make more well informed decisions and maintain positive employee relations while protecting your company legally.

Rule 4: The Issue Drives the Outcome

Many unsuspecting hourly workers assume that cheating on their timecard could result in a mere slap on the hand if they’re caught. Very few realize that time is a proxy for money in the workplace. In other words, stealing time is tantamount to stealing money in most companies’ eyes and therefore subjects workers to immediate termination (i.e., summary dismissal)—even for a first offense.

In circumstances regarding egregious misconduct where the employer has little to no discretion to “save” an employee who simply made a poor judgment decision, the issue drives the outcome. In other words, the issue—in and of itself—forces the company to move in a certain direction without consideration of other mitigating circumstances. For example, if you steal money from the cash register, you’re fired. No ifs, ands, or buts. But if you add overtime to your timecard that you never worked, have a friend swipe in for you after lunch while you’re still shopping at the mall, or otherwise falsify your timecard, you’ll be terminated immediately because failing to do so could create a dangerous precedent for the organization. And that’s the key to remember: If doing anything less than outright termination would make you, the employer, appear as irresponsible or leave you vulnerable to creating an unwanted precedent, then you have no choice but to terminate. Such “third rail” offenses limit or totally eliminate your discretion to retain the employee—even if it’s a long-term worker who made one simple negligent or ill-thought-out decision one day. In short, no matter how long you’ve been with the company, no matter how stellar your track record or how much everyone loves you, if you step on the third rail, you’re toast. The misconduct-related issue (e.g., theft, embezzlement, documentation fraud) triggers the company’s automatic response.

Nothing’s more frustrating to HR practitioners and workplace investigators than when employees engage in gross misconduct and force their employer’s hand to terminate them. Still, this happens from time to time, and when it does, you need to act swiftly and decisively to terminate or else face creating a precedent that could come back to haunt you in the future (when someone else engages in the same conduct and argues that you have no right to terminate them since you didn’t terminate this person).

Rule 5: The Importance of Timeliness

Imagine this: An employee is accused of theft. When you first learn about this and meet with the employee to learn her side of the story, she explains to you that she’s pregnant and is prepared to give you a medical provider’s note showing that she is disabled by her pregnancy and needs some form of accommodation to continue in her role. What do you do?

The key in a situation like this is to act swiftly and explain to the employee that the two issues are separate and distinct: “I didn’t know you were pregnant, and I’d be happy to speak with about that, but first we have to investigate this allegation of theft. If that turns out to be valid, then I’m afraid we may need to move to termination. At that point, you’ll be able to discuss your medical needs directly with your physician, but you’ll no longer be employed by our company. We’ll need to investigate the theft allegation first and then move on to your request for medical accommodation if that’s appropriate at that point in time.”

Speak with the employee immediately about her side of the story. Gather the names of any witnesses she proffers to exonerate herself, and then place her on an investigatory leave with pay. Alert your in-house or external counsel about this since it could result in a lawsuit (after all, terminating pregnant females who claim disability is a risky business under any circumstances), and then do your best to conclude the investigation with 24 – 48 hours. At that point, get back to the employee and let her know the outcome of your investigation. If you opt to terminate her, there’s no reason to engage in the interactive process; however, if you opt to do anything other than terminate her (for example, issue a final written warning instead), then engage in the interactive process about her pregnancy-related disability as soon as is practicable.

Rule 6: Removing Employees from the Workplace: a Necessary Consideration in the Investigation Process

You’ll notice in the example above that we immediately placed the individual on a paid, investigatory leave. That’s because you want to ensure that you can conduct an unencumbered investigation—after all, a problematic employee’s presence can impact the results of an investigation if the individual somehow pressures or influences others to respond in a certain way. But there’s a second reason why removing the employee from the workplace can be very important: If your company suspects that this person may have stolen / embezzled / committed fraud / threatened another, you’ll probably want to create a record that you had enough legitimate concern to remove her from the workplace.

If you don’t and it takes two weeks to conclude your investigation and then you terminate her, a plaintiff attorney will arguably conclude: “Well, you couldn’t have been that concerned about her stealing from your company if you let her continue to work for an additional two weeks unsupervised.” The attorney’s logic: The fact that you allowed her to continue to work and left her unsupervised for two weeks after the investigation began indicates that you clearly weren’t that concerned that she’d steal/embezzle/threaten another’s safety again. Therefore, you could have found some other alternative to termination (like corrective action and/or suspension) since the employee didn’t pose that great a risk to the organization.

As a result, you should err on the side of caution and remove an employee from the worksite whenever you have a serious concern that leaving the person alone and unsupervised could result in serious further damage to your company or could create a perception that her presence at the worksite isn’t of major concern. If you fail to take that interim step of removal, expect a plaintiff attorney to argue that your decision to terminate was extreme, unfounded, and unnecessary.

Should an investigatory leave be paid or unpaid? It depends: some companies always pay for investigatory leaves, while others only pay for the leave time if the individual was found to be innocent of the charges brought forth. The decision to pay for the leave is ultimately up to you, but I typically recommend paying for the time off under all circumstances: Consider it a cheap insurance policy that helps you look like a fair and objective employer who isn’t looking to “punish” the worker unnecessarily. There could be exceptions, of course, so speak with qualified counsel when in doubt.

Rule 7: Sameness vs. Consistency

Supervisors often make the mistake of assuming that everyone has to be treated exactly the same when, in fact, it’s consistency that they’re looking for. There’s an expression that says, “If all you have is a hammer, everything starts to look like a nail.” Supervisors and managers have more discretion than they think in many circumstances, and simply trying to treat every infraction exactly the same misses the point. Let’s look at an example . . .

Sleeping on the job is a serious infraction in any situation. But does it warrant a first written warning, a final written warning, or outright termination? As with many workplace investigations and employee relations issues, the answer is, It depends. Has the individual caught sleeping at his desk done this before? How long was he asleep? Did his falling asleep cause some negative organizational impact that warrants an immediate termination on the one hand or little if any corrective action at all on the other?

Don’t look only at the issue of sleeping: it’s also about the conditions and circumstances surrounding the act of sleeping that play an important role in rendering an appropriate decision. Here’s how companies have ruled in the past:

  • An insurance claims adjustor caught napping at her desk receives a first written warning for inappropriate workplace conduct.
  • A charge nurse on the graveyard shift of a hospital’s ICU unit caught sleeping at the consul may be issued a final written warning—even for a first offense—since patients’ safety may be jeopardized
  • An anesthesiologist who falls asleep during surgery may be terminated outright, seeing that a patient’s life may be in danger by his actions.

As you can see, it’s not the sleeping per se that drives the outcome: it’s the circumstances surrounding the sleeping that must be considered, and the potential negative organizational consequences typically drive the employer’s decision to act in a certain way.

A company is being consistent when it issues a written warning for one incident (claims adjuster), a final written warning for another incident (charge nurse), and an immediate dismissal for yet a third incident (anesthesiologist) under different circumstances. One size doesn’t fit all in the world of workplace investigations and employee relations, so remember to look at the totality of events rather than isolated behavioral acts.

Rule 8: Performance vs. Conduct—A Critical Distinction

Organizations typically refer to their “standards of performance and conduct” as a general “catchall” for their policies, procedures, and workplace expectations and guidelines. But there’s a tremendous difference between a performance infraction and a conduct violation, and it’s critical that you understand how they differentiate themselves.

Performance infractions typically refer to problematic performance in the areas of quality, quantity, speed, customer service, and even attendance/tardiness (although many companies split attendance out from the broader “performance” category). When problems occur in these areas, companies are expected to provide “workplace due process” as outlined in their employee handbooks and policy and procedure manuals. Specifically, a step system of increased consequences gets documented each time an additional infraction occurs, and each progressive step contains some added element indicating the severity of the situation if it isn’t remedied immediately. Most companies follow a “three strikes and you’re out” progressive discipline paradigm that looks something like this:

Step 1: Documented verbal warning

Step 2: Written warning

Step 3: Final written warning

After that final written warning is issued, a “clean” final incident will typically justify termination of employment. There can be exceptions, of course. A new hire who is 30 days into a new position with her company may be terminated without prior written documentation or may receive one documented warning just to protect the company before being dismissed. (It depends on the company’s tolerance for risk: Some organizations feel that the one written warning will serve as an insurance policy of sorts to keep plaintiff attorneys from suing because “Did you ever receive documented corrective action before you were terminated?” is still one of the first questions that plaintiff attorneys ask when considering whether to take on a new case.) On the other hand, a 30-year employee may be accorded greater workplace due process because of his years of tenure. As an example, the individual may be given a “Performance Improvement Plan” or “letter of clarification” as incremental, additional steps that document the problems without escalating the formal corrective action chain that leads to termination.

Whatever the case, when it comes to performance and attendance infractions, the general expectation is that the company follows its policies and accords workplace due process in the form of stepped up corrective action notices so that the worker understands what the problem is, what he needs to do to fix the problem, and what the consequences will be if he fails to demonstrate improvement within a reasonable timeframe.

Not so with conduct infractions: Conduct infractions may lead to immediate dismissal even for a first offense where there is no prior corrective action on record. And even if a company opts not to terminate on a first offense, the organization may arguably proceed straight to a final written warning and stop just shy of termination—even for a first offense.

You could probably guess that if an employee engages in theft, then termination would be the result—even for a first-time offense. In such cases, the issue drives the outcome, meaning that the company doesn’t have the discretion not to terminate. It simply has to terminate for the sake of the record that’s being created and in order to avoid creating an unwanted precedent. After all, if you don’t terminate Employee #1 for stealing, how could you justify terminating Employee #2 at some point in the future without looking like a discriminatory employer? Ditto for embezzlement, fraud, egregious cases of sexual harassment, and the like.

This makes horse sense—If someone stole from the company, he should expect to be fired, so you—the investigator—probably wouldn’t have too much of a challenge justifying termination for someone on your team who took cash out of the till. But what about someone who demonstrates a total disrespect or contempt for his supervisor or coworkers? What about someone who constantly demonstrates a “bad attitude” and kills workplace camaraderie and departmental morale? Many employees mistakenly assume—as do their supervisors—that as long as their performance is acceptable, the company can’t do anything to them to address their poor conduct.

Not so . . . That’s a very serious mistaken assumption on the employee’s part, and a key blind spot for supervisors who don’t realize they have discretion to escalate through the progressive discipline process to address the problem. After all, every employee is responsible for both their performance and conduct: they don’t simply get to focus on one and not the other. Everyone is responsible for performing at an acceptable level and ensuring that their coworkers feel welcome and comfortable working with them.

Therefore, think of the performance-conduct circle as two halves of the same whole: You can’t have one without the other, and when an investigation reveals that someone is bullying, confrontational, condescending, or otherwise vexing to his supervisor and teammates, remember that you have the discretion to move straight to a final written warning—even for a first offense, if necessary. Again, supervisors have a lot more discretion than they often think . . .

Rule 9: Beware the Dreaded “Preemptive Strike”

Many an unsuspecting investigator in corporate America has fallen prey to the classic “preemptive strike” where workers who are on the ropes performance-wise “reverse engineer” the record and put the company on the defensive. Sometimes they figure out how to do this on their own, but more often than not they’re getting coached by a plaintiff attorney on the sidelines who’s helping them construct the strongest case against the company. Remember, a plaintiff attorney won’t typically get involved on “contingency” (meaning they only get paid if they win the lawsuit) unless the case is really strong against the organization. They’ll typically advise a potential client (i.e., one of your current employees), “Look, I can’t really help you until they fire you, demote you, or take some other concrete action against you. But let me ask you this . . . Do you know who your HR contact is? Is there anything you could lodge a complaint about in terms of your supervisor’s behavior, especially in terms of discrimination, harassment, or retaliation?” And that’s how the game begins, unbeknownst to the supervisor or investigator in question.

In short, an employee who’s concerned that she may be in trouble for poor performance decides to strike first against the company by making allegations first against her immediate supervisor’s conduct. Here’s how the behind-the-scenes facts play themselves out in real life. It’s a Tuesday night and you’re sitting in your office when the VP of Legal Affairs comes into your office to speak with you regarding concerns he has about his paralegal. He explains that she’s constantly falling behind on her work, doesn’t know the contracts and clients like she should, appears to be plagued by many personal problems that she brings into the office each day, and bolts for the door right at 5:00 every night and won’t make herself available for overtime. You ask the VP what he wants to do about it, and he says he’s not sure yet. He just wants you to know about it and tells you that he’s going to discuss this with his supervisor, the company’s general counsel, before the week is out.

Guess who comes to visit you on Wednesday morning? You guessed it—the paralegal. And what does she have to share with you, you ask? She states that she suddenly remembers an off-the-cuff remark, comment, or gesture that her supervisor made six months or a year ago and is suddenly so “offended” that she feels compelled to report it to HR immediately. In fact, she tells you that she’s been struggling with this for months, that she can’t sleep, that it’s damaging her personal relationships, and she just can’t take it anymore. She also states that her supervisor, a Hispanic male, has a macho complex, treats women poorly, and makes inappropriate comments about women’s roles in the workplace.

You naturally ask her why she didn’t come forward sooner, and the typical answer is, “Oh, I couldn’t – I totally feared retaliation. I knew my boss would fire me if he ever found out that I disclosed this to HR, and I just couldn’t risk losing my job over this.”

Flash question: As she begins informing you of all this, do you (a) not say anything about his visit to you the night before where he was complaining about her job performance or (b) stop her before she goes much further and let her know that he came to see you last night to inform you that he felt she was falling behind in her work, didn’t know her contracts or clients as well as she should, refused to work overtime, and brought her personal problems to the office often?

While there are arguments for both responses, Option B has many more advantages for the company. First, it’s honest and transparent: after all, you can’t know as an objective third party who’s right or wrong—she may be a poor performer and he may treat her poorly because she’s a female. Rather than make any assumptions at this point, you should just report what you’re hearing in a spirit of full disclosure. Second, you’re creating a clearer record so that the paralegal is aware of the VP’s concerns. (You’ll have to likewise make the VP and his supervisor, the general counsel, aware of the paralegal’s concerns, of course.) Third, and most important, if you share the VP’s concerns with the paralegal upfront in this initial meeting on Wednesday morning, it won’t come back to haunt you later down the road in the form of a potential retaliation claim.

Think of it this way: If the paralegal isn’t made aware that her boss came to HR to complain about her job performance on Tuesday night and then on Friday receives some form of corrective action, she will logically jump to the conclusion that this adverse employment action is solely in response to her lodging a complaint with HR. After all, she’ll reason, “I went to HR on a Wednesday to complain that my boss was harassing me, and the next thing I knew, I got a written warning for substandard job performance on Friday.” Had she known that the other discussion was in play, you’d be able to keep the two matters separate. In essence, you’d explain that you intend to look into her claims very seriously, but she needs to understand that he’s speaking with the general counsel right now about problems he’s having with her performance.

And voila—you’ll have removed the arrow from her quiver so that she can’t later lodge a “retaliation” complaint at your company. Fairness and openness are key issues in every investigation, but they become especially important when there are multiple allegations being levied against people at the same time. It’s perfectly acceptable to have two plains of investigation happening simultaneously: what’s important is that you share this openly right upfront. In essence, your goal is to address both concerns while making it known that both matters—her performance and his conduct—are being investigated.

Rule 10: Vet the Record Before Recommending Termination

Termination is a result of workplace investigations from time to time. Make sure that you’re accounting for the key issues that any plaintiff attorney will consider in evaluating a case and determining whether to bring suit against your organization. In terms of the individual being considered for termination, review the following before recommending any termination action:

  • Date of Hire / Tenure
  • Age (key protection = 40 or above)
  • Ethnicity
  • Gender
  • Corrective Action History
  • Most Recent Performance Review Score and Overall Performance Review History
  • Open Workers’ Comp Claim
  • Open Intermittent FMLA Claim
  • Disability Status (i.e. is the company currently engaging in the ADA interactive process with this individual?)
  • Pregnancy
  • Possibility of a Retaliation Charge for Having Lodged a Good Faith Complaint Against the Organization (AKA “whistleblower” protection)
  • Supervisor’s Age, Ethnicity, and Gender (to counter claims of discrimination)
  • How long has this supervisor managed this employee?
  • Did this supervisor originally hire this employee? (to counter claims of discrimination)

Armed with these ten “street smart” guidelines to practical workplace investigations that may come your way, you’ll be much better prepared to address exceptional situations with confidence and skillful aplomb.

 

workplacecover_smallSpecial Note: For further information on conducting successful workplace investigations, please visit our Web Store and consider purchasing the Workplace Investigation Toolkit, a 50-page detailed summary outlining the specific steps of an internal investigation, the laws and statutes that govern workplace investigations, communication obligations with those under investigation, and templates, checklists, and investigation summary forms to protect your organization and create a thorough and legally-defensible investigation record.