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Effectively managing complaints can help keep your organization out of court.
The cost and frequency of employment litigation have skyrocketed in recent years, and the carefully built reputations of many companies have been tarnished through negative media coverage generated by whistle-blowers, government investigations and expensive lawsuits. Much of this damage can be avoided by having an effective system for receiving, investigating and resolving ethics and employment-related complaints.
In multinational companies, investigations are exponentially more complex because local laws and processes must be understood and followed in each jurisdiction across the globe. Each investigation is unique, and seeking the truth is challenging. The steps presented in this article can help HR professionals in multinational companies focus on critical areas when designing or refining an investigation protocol or when conducting an investigation. It is essential to construct a process that will help ensure that your investigations are conducted in a lawful, consistent and effective manner.
One of the most significant challenges HR professionals face is getting employees to channel complaints of misconduct or policy violation appropriately within the company so that issues can be resolved internally. Employees who believe that reporting is futile or who fear retaliation may choose instead to report their issues externally to government agencies, outside lawyers or both. Websites and advertisements urge such employees to turn to plaintiffs’ lawyers for help in filing a lawsuit or blowing the whistle. Resulting verdicts have been staggering. Effective incident management systems and investigation protocols and processes can help keep an organization’s complaints within the organization and out of court.
Step 1: Investigation Triggers
It is essential that companies create a culture that encourages reporting. Problems can occur not only inside the workplace but also outside it through social media, in the form of words, pictures and actions. Every company should have an incident management program that includes a reporting process, a nonretaliation policy and a policy to speak up if employees encounter misconduct.
The company may be put on notice of something that requires investigation through many different "triggers." For example, an employee may complain of something bad that happened to him or her or may report a wrongdoing.
Other sources of internal triggers include:
It is interesting to note that only a small percentage of complaints are reported through hotlines and that the majority come through managers and supervisors. This is why it is so critical to train managers, supervisors and employees on the importance and duty of speaking up and to teach managers that they need to report information to HR, even if they think it’s trivial, and that they should not investigate on their own.
Step 2: Triage
The second step is to use a standard process to review and filter allegations to develop an initial response plan. Consider the following key areas:
Severity. Are high-level employees involved? What is the potential impact on the victims? How widespread is the alleged misconduct?
Complexity. Analyze the number and types of issues. Are there multiple areas of law and jurisdictions involved? Consider the rights of the accused.
Urgency. Is the safety of the employee or a witness a concern? Should the company call the police? Is there a medical issue? Should the accused be placed on paid or unpaid leave? Are there safeguards for possible victims?
Credibility. Is the source known, or is this an anonymous complaint? Can the facts be easily verified?
Attorney-client privilege. Should this investigation be subject to attorney-client privilege? If so, take the necessary steps to preserve the privilege.
The answers to the foregoing questions will determine how you plan and assign your investigative team.
Step 3: Plan and Assign
For each issue, establish an investigative team to determine the need for privilege and take necessary steps to discover and preserve evidence. Make sure you understand the employee’s rights and obligations under foreign law.
For example, if you terminate an employee in France for misconduct discovered during an investigation and the employee sues to contest the dismissal, the evidence will be admissible in court only if you have not had the evidence for more than two months, the evidence was not obtained in violation of French data-privacy laws, and you respected all legally required procedural rules in the investigation and termination process.
And in the U.K., employees have a right to demand a wide range of data about themselves, even during a confidential investigation.
When planning and assigning investigations, be sure to:
Determine the investigative team. Potential members could include representatives from the HR, compliance, legal and security functions.
Address technical and logical issues. If needed, engage experts who can help navigate through foreign-language documents, distant witnesses and evidence, legal and cultural issues, and differences in processes.
Identify and preserve evidence. Consider data-privacy issues. Find the location of key electronic data and preserve it. Identify key witnesses. Involve counsel to trigger privilege. Decide if a litigation hold is necessary. Determine if you need to conduct third-party interviews and obtain outside evidence. It is also important at this stage to identify key stakeholders for oversight; this could include general counsel, the audit committee, a special committee, the chief compliance officer or high-level HR executives.
Consider potential initial disclosures. Decide whether it is necessary to disclose the investigation to employee representatives, a data controller, the audit committee or senior management.
Step 4: Investigations
Remember, each investigation is unique. The facts and circumstances will dictate what specific procedures will follow. Consider the following steps:
Conduct data and document review. Depending on the facts, look at personnel records, supervisor files, e-mails, texts, project files, expense reports and voice mail. Caution: This should be subject to local legal review.
Start to develop a fact pattern. Determine who was involved. Tell the story of who, what, where, when and how. Consider necessary data privacy and union/works councils notifications as the facts develop.
Conduct interviews. Be prepared. Develop and use good interviewing techniques. Know which evidence to look at. Have a plan to encourage cooperation and to address noncooperation. Let witnesses know that retaliation will not be tolerated. Address the importance of the investigation, any restrictions and the need for confidentiality. It is important to note that confidentiality has its own restrictions and parameters depending on the jurisdiction and who is being interviewed.
Understand fact patterns. Have you confirmed the allegations? Have you discovered other possible problems? Whom do you need to speak to? What additional evidence needs to be reviewed?
Create a written report of factual findings. Develop the fact pattern, and report only factual findings. Do not draw legal conclusions or include recommendations in the written report, and do not document them in your case management system. Report these facts to management.
Step 5: Remediation
After the investigation has concluded and the investigator has made factual findings, it is the job of management or other decision-makers to assess the findings and to determine and take appropriate action. No investigation is worth doing if appropriate corrective action is not taken. Appropriate action could involve verbal or written warnings, suspension, demotion, termination, reassignment, or no action. Often, it is important to have the proposed action reviewed by local legal counsel before it is implemented.
If you have seen a problem that slipped through the cracks or any part of the system that failed to work, it is essential to assess your programs and processes and make recommendations for improvement during this step.
Step 6: Follow-Up
Last, but certainly not least, follow up with the complainant. For example, if you have not terminated the alleged harasser in a harassment case, it is important to contact the victim to make sure the harassment is not continuing. The same procedure should be followed in a discrimination case.
Make sure throughout this entire process that retaliation is not occurring, and proactively monitor for retaliation. Seek feedback from potential victims of retaliation, and document your efforts to manage the risk of a retaliation lawsuit.
At the end of the process, inform the appropriate parties that the investigation has been concluded and that the company has taken appropriate measures to stop the inappropriate behavior. If possible, avoid describing the exact disciplinary action taken.
While each global investigation is unique, there are some common mistakes. Examples include the following:
Making missteps early on. Mistakes in the first 72 hours can cause the entire investigation to fail. Evidence can be lost, or poor documentation can send you down the wrong track.
Missing the forest for the trees. Don’t get sidetracked or overlook issues that may be important or that may need to be revisited or separately investigated.
Failing to communicate. If you leave complainants hanging, they will assume you are doing nothing. Provide updates that demonstrate you are actively investigating the situation, without sharing specific details.
Trampling on evidence. Inexperienced investigators or others in the organization can inadvertently destroy, corrupt or inadequately secure critical evidence—or even create new problematic evidence, such as e-mails or notes commenting on the investigation.
Accepting information at face value. Investigators may have to assess credibility where evidence or accounts conflict. Be careful not to let your preconceptions influence you.
Failing to understand cultural differences. If you do not understand the culture, you may miss what employees are trying to tell you or not get the information you need from the witnesses.
Allowing retaliation. Retaliation against complainants or witnesses opens you up to additional legal risk and erodes the culture of compliance needed to encourage internal reporting.
Failing to honor employees’ rights. Be alert to the need to protect the rights, privacy and reputations of investigation subjects and others, and then balance this need with the need to conduct an effective investigation.
Drawing legal conclusions. The investigation report should never contain legal conclusions. Remediation decisions will be based on the factual findings.
Countries apply different requirements to the investigation process. It is important to know the country’s laws and procedures pertaining to:
Creating and implementing an effective and compliant investigation process in a global environment can seem daunting. Take it one step at a time, while being alert to categories of differences, and rigorously manage the moving parts and processes.
Katherine Cooper Franklin and Tahl Tyson are shareholders in the International Employment Law practice group in the Seattle office of Littler. If you would like a color illustration of a global investigation road map, contact firstname.lastname@example.org or email@example.com.
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