How to Conduct a Workplace Investigation

Don’t be found guilty of a sloppy workplace investigation. Learn how to avoid costly mistakes.

By Dori Meinert Dec 1, 2014

1214-Cover.jpgJames Castelluccio, a former IBM vice president, was awarded $4.1 million in July 2014 by a federal judge after a jury in Connecticut found that the then-61-year-old employee was wrongly terminated because of his age.

Before the trial and afterward, U.S. Magistrate Judge Thomas P. Smith harshly criticized IBM’s internal handling of an age-discrimination complaint that Castelluccio had taken to HR before he was let go.

While the HR investigator had concluded that the executive was treated fairly, the judge said the HR report was one-sided and blocked IBM from submitting it as evidence at trial. Specifically, he noted that the HR report failed to include evidence favorable to Castelluccio, including his performance reviews.

The judge wrote that he suspected “the purpose of the investigation was more to exonerate IBM than to determine if Mr. Castelluccio was treated fairly.”

IBM has appealed the decision. A spokesman declined to comment.

10 Common Investigation Mistakes

Failing to plan.

Ignoring complaints.

Delaying investigations.

Losing objectivity.

Being distracted during interviews.

Using overly aggressive interview tactics.

Not conducting a thorough investigation.

Failing to reach a conclusion.

Failing to create a written report.

Failing to follow up with those involved.

The ruling is one example of how a poorly conducted internal investigation can cost a company financially and damage its reputation, not to mention the reputations of the HR professionals tasked with overseeing such a probe.

“The IBM case should serve as a wake-up call to HR managers across the United States,” says Lorene Schaefer, an employment lawyer and workplace investigator in Atlanta. “In today’s world, being able to conduct an effective internal investigation that will withstand legal scrutiny is a core competency for HR professionals.

“The public and employees and your jury members expect more today. They’re more sophisticated,” says Schaefer, founder of Win-Win Resolve, which provides training in workplace investigations.

On the other hand, a properly conducted investigation—one that is prompt, thorough and impartial—can help defend a company should a lawsuit be filed later. By ensuring a fair investigative process, HR professionals also can help build morale and trust among employees.

“Some people will not be happy regardless of the decision you make,” says Denise M. Domian, senior vice president of HR at The Bon-Ton Stores Inc. in Milwaukee. “But trying to make sure we are going about it in a way that is sensitive and meaningful can help diminish their dissatisfaction. Even if they’re not happy with the answer, at least they feel they’ve been heard.”

It’s Complicated

Conducting workplace investigations is one of the most challenging duties that HR professionals must take on. Workforce demographics are shifting. New laws are constantly popping up. Managers make mistakes because they aren’t properly trained or they’re under pressure to resolve complaints quickly. Employees are more aware of their rights.

“I don’t know any other business area where things can change so dramatically in a fairly short period of time as far as legislation or best practice or new research,” says Faith Laframboise, North American manager of HR for Spirol, a fastener manufacturer based in Danielson, Conn. “That makes it incredibly challenging to stay on top of everything.”

She recalls the trepidation she felt conducting her first workplace investigations. “It was a challenging and quite intimidating thing to have to handle for the first few times,” Laframboise says.

Ideally, with proper training and experience, a novice investigator over time develops a greater comfort level in handling complaints, she says. But the task is not for the faint of heart.

“There’s a quagmire of potential landmines that you have to navigate through,” Laframboise says, “and sometimes you don’t always know that when you’re heading into it.

Make a Plan

While many HR departments investigate every employee complaint, employers are legally mandated to investigate harassment, discrimination, retaliation, safety and certain other types of complaints.

Once the decision to investigate has been made, some HR professionals may be tempted to immediately start scheduling interviews. However, good investigators will first create a plan that answers these questions:

  • Who will investigate?
  • What will be investigated?
  • What evidence needs to be collected?
  • Who will be interviewed?

“You need to clearly define the purpose of the investigation and the scope of the investigation,” Schaefer says. “If you don’t understand the purpose of the investigation, you will get off track.”

Be Objective

While it may be tempting to tune out an employee who has made many prior complaints, don’t do it. “The 10th time they come to you, you still have to listen to them as if it were the first,” says Sheila Felice, HR and risk manager for the optical division of Swarovski Optik NA Ltd., based in Cranston, R.I.

“We don’t have the luxury of becoming jaded or forming opinions before the investigation is complete,” she says. “You can’t pass judgment or form an opinion based on personal feeling or prior dealings.”

Tiffany Cardwell, PHR, vice president of HR for Signature Healthcare’s rehab segment in Louisville, Ky., advises, “Never make assumptions unless you have facts and data to back it up. Sometimes the HR person is too close to the topic, and their judgment may not be where it should be.”

Be alert to any potential conflicts of interest when choosing an investigator. In an Illinois workplace harassment case, an appeals court criticized Chrysler’s internal investigation because, among other things, a principal HR investigator looking into an employee’s complaints of anti-Semitic death threats and property damage was married to someone on the employee’s list of suspects. A jury awarded $4.2 million to the Chrysler employee, but the amount was reduced to $300,000 by an appeals court last year.

‘He Said, She Said’ Cases

With proper planning, HR professionals can better address “he said, she said” cases that tend to cause them to throw their hands up in frustration.

Before interviewing witnesses, gather physical evidence that might validate the complaint. For example, e-mail messages might show that a male supervisor has made inappropriate sexual comments to a female employee, which corroborates the female employee’s complaint.

Then, plan the order in which interviews will be conducted.

“In determining which person to interview next, I ask, ‘What’s my risk of feeding the rumor mill, and what’s my reward going to be? Is my reward really going to be greater than the risk?’ ” says Natalie Ivey, SPHR, author of How to Conduct Internal Investigations (Results Performance Consulting Inc., 2013) and president of Results Performance Consulting Inc. in Boca Raton, Fla.

Ivey recalls a harassment case in which a male employee was accused of coming on to a female worker at the copy machine. “He claimed he was making copies, but I had evidence that his copier code was never used. I was able to gather the information beforehand and confront him last,” she says.

Finally, plan questions in advance and use open-ended questions to draw information out of the witnesses.

“You have to have really great interview skills to be able to confront people who are lying and, at the same time, coax reluctant people to share and give you a statement so you have other evidence to substantiate the allegations,” Ivey says.

Avoid Aggressive Tactics

Auto parts retailer AutoZone has been the target of numerous lawsuits challenging its use of aggressive interview tactics to extract confessions from employees suspected of theft.

In 2006, jurors awarded Joaquin Robles $7.5 million after concluding that AutoZone investigators falsely imprisoned Robles when they held him in a back room and threatened him with arrest if he didn’t confess. The award was reduced to $700,000 on appeal.

At the time, AutoZone investigators used an interrogation method called the Reid Technique, frequently used by police and security officers to detect whether a suspect is lying.

Determining Witness Credibility

When there are conflicting versions of events in harassment cases, the U.S. Equal Employment Opportunity Commission suggests using the following factors to assess witness credibility:

Plausibility. Is the witness’s version of the facts believable? Does it make sense?

Demeanor. Does the witness seem to be telling the truth?

Motive. Does the person have a reason to lie?

Corroboration. Are there documents or other witnesses that support the witness’s version of events?

Past record. Does the alleged wrongdoer have a past record of inappropriate conduct?

The Investigative Report

Every report should include:
  • The incident being investigated, with dates.
  • The individuals involved.
  • Key factual findings and credibility determinations.
  • Applicable employer policies or guidelines.
  • Summaries of witness statements.
  • Specific conclusions.
  • The name of the person making a final decision.
  • Issues that couldn’t be resolved.
  • Employer actions taken.
Source: SHRM How-to Guide: How to Conduct an Investigation.

Saul Kassin, a psychology professor at John Jay College of Criminal Justice in New York City, testified as an expert witness in Robles’ trial. He calls the Reid method “out of step with science” because it relies on behavioral cues that detect anxiety, not deception. “So, the problem is somebody becomes a suspect on very thin grounds,” Kassin says.

While employee theft is a big problem in the retail industry, not all retailers use the controversial Reid Technique for investigation interviews.

“We would rather err on the side of caution,” says Domian of The Bon-Ton Stores.

The company’s loss prevention investigators share the evidence they have with HR before questioning an employee, and HR sits in on that interview. Ultimately, HR decides whether disciplinary action is needed. Regional HR directors are available to guide the HR managers in individual stores, and company attorneys are often consulted, according to Domian.

HR professionals should be more like Joe Friday, the lead character from the TV series “Dragnet,” than Eliot Ness, who doggedly pursued gangster Al Capone, says James Galluzzo, SPHR, HR director for the South Carolina State Housing Finance and Development Authority in Columbia, S.C.

A quote associated with Joe Friday, “Just the facts, ma’am,” reminds Galluzzo that HR is acting as a fact-finder.

“Ask straightforward questions to get straightforward answers, and always be respectful,” he advises. “Lawsuits can be avoided if there is a perception of fairness and respect that is delivered across the board.”

Even the location of interviews can affect the outcome of the investigation. Schaefer has seen HR professionals interview witnesses on the warehouse floor in full view of their co-workers. Employees are less likely to share information under such circumstances, she says, and they will likely be reluctant to come forward to report any misconduct in the future.

Be Quick but Thorough

While HR professionals have many demands on their time, it’s critical to investigate an allegation quickly, Laframboise says. “You just have to make it a priority and set the time aside.”

Stretching an investigation out over a lengthy period tells employees the alleged misconduct isn’t important.

As time goes by, it will become more difficult to collect evidence and get witnesses to talk. Details are forgotten. Documents disappear. Bad behavior continues.

Some HR departments may get by for years doing less-than-thorough investigations without the kind of serious repercussions that get a company’s name into the headlines.

“But it just takes once,” Laframboise says, for significant reputational damage to be done.

Another mistake that Schaefer has seen involves HR professionals who fail to focus on the employees being interviewed. In some cases, the interviewer is constantly interrupted by phone calls or texts. One of Schaefer’s fellow attorneys recently testified on behalf of a fired employee who won a $1 million award in an arbitration case. The employee complained that the investigator didn’t even look at him during the interview or listen to his side of the story.

Maintain Confidentiality

Encourage all those involved in the investigation to keep the proceedings confidential to protect the integrity of the process. If word leaks out, other employees will lose trust and might refuse to share what they know.

A word of caution is in order for the HR team as well.

Never share information with a colleague if he or she wasn’t directly involved, Felice advises. “It’s not that you can’t trust your colleagues. It’s about mitigating risk whenever possible.”

However, don’t promise an employee that his or her complaint will remain confidential, because it might be necessary to share the information down the road.

Reach a Conclusion

Ultimately, the investigator must weigh the evidence and conclude whether company policies were violated or misconduct occurred. Many HR investigators are reluctant to do this, Schaefer says.

“People don’t want to decide that someone’s not telling the truth,” she says. “It’s human nature. We don’t want to call someone a liar.”

In a criminal trial, prosecutors must prove “beyond a reasonable doubt” that an act occurred. However, the standard for workplace investigations is “the preponderance of the evidence.” Is it more likely than not that the incident occurred?

For guidance, Schaefer recommends using the U.S. Equal Employment Opportunity Commission (EEOC) instructions on how to make credibility assessments and the standard jury instructions for the federal circuit court of appeals.

The investigator should document any factual findings in a written report. Some HR professionals, particularly at smaller companies, are lax about finalizing their investigations with a written report, Ivey says.

“There’s nothing that documents how they got from the complaint to substantiation to termination,” she says.

If the company terminates an employee and that person later files a retaliation complaint with the EEOC, the HR investigator will want to have case notes and witness statements to protect himself in court.

“A lot of times,” Ivey says, “a well-written report can help you minimize the risk of liability.”

Follow Up

Even after a written report is submitted, HR must take additional steps:

  • Submit the findings to the decision-maker (typically not the investigator), who will determine what disciplinary action to take. The decision-maker, either a high-level HR professional or a business leader, should be high enough in the organization to determine how people in similar situations have been treated, Schaefer says.
  • Notify the employee who made the complaint that action was taken—even if details can’t be shared for privacy reasons.
  • Reintegrate the employees involved back into the workplace, shifting focus from the complaint to the changes the investigation has brought about.
  • Remind managers that retaliation won’t be tolerated, and check back within six months to ensure that there has been none.
  • Review the investigation to determine what could be done better the next time.
  • Look for patterns in complaints that might suggest more training is needed to avoid similar problems in the future.
  • While every complaint is unique, having a well-defined, consistent process in place can ward off future lawsuits. Treating employees with respect during the process has additional rewards: building employee trust and creating a better work environment.

    As Ivey says: “The best investigation is the one you don’t need to conduct.”

Dori Meinert is a senior writer for HR Magazine.


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