Sometimes, it may not be smart to involve your lawyer. (Remember: this advice comes from a lawyer!)
Following key decisions by the U.S. Supreme Court last year on sexual harassment issues, smart employers now are aware that merely having an employee manual with strict workplace harassment rules is not enough. Despite a well-articulated company policy, sexual harassment claims still are a possibility. Now, more than ever before, these claims must be properly investigated.
Employers can minimize or even avoid liability for the conduct of managers who create a sexually hostile and abusive work environment. The key is to respond to complaints quickly and decisively, and to thoroughly investigate the allegations.
An employer's first responsibility, of course, is to take reasonable care to prevent such behavior. After the fact, an employer must promptly correct the abusive conditions based, in part, on a complaint and investigation process that is understood and readily accessible by all employees.
Sexual harassment cases have two components: first, the nature and degree of credible evidence that supports the allegations; and second, the sufficiency of the employer's investigation and corrective action.
If a lawyer conducts the investigation and the employer follows up with remedial measures based on that investigation, then the employer may be forced to waive its attorney-client privilege to prove that it responded promptly and appropriately to the alleged victim's claims. Thus, a company's counsel could be subjected to a deposition, and, among other things, end up disclosing his or her investigative notes, which could contain candid admissions of company managers who believed they were confiding in their attorney.
The problem stems from the lawyer having two roles: internal investigator and legal advisor. While acknowledging that the attorney-client and litigation work-product privileges apply to workplace harassment cases, judges nevertheless will rule that an employer waives the protections of these privileges when it defends the charges by claiming that it conducted a thorough investigation and took appropriate remedial action.
A New York federal district court handed an employer a small victory, however, when it ruled that pre- and post-investigation communications between a company and its attorneys need not be disclosed. As the court saw it, the key issue was whether the company's investigative steps and corrective action measures were reasonable, which did not depend on legal advice given before or after the investigation. If the company had argued that it had a complete defense simply because it had sought and acted on legal advice, then it would have lost the privilege for all attorney-client communications.
As if things were not difficult enough, the legal staff of the Federal Trade Commission (FTC) has weighed in with its own perspective on employer obligations in workplace harassment cases. According to the FTC staff, any outside organization, such as a law firm or a human relations consultant, that conducts investigations of alleged sexual harassment for a fee and produces an oral or written report containing matters relating to the character, reputation or personal characteristics of employees, is considered to be a "consumer reporting agency" under the federal Fair Credit Reporting Act. The law requires employers who engage such an organization to notify the subjects of the investigation, to obtain their written consent and to provide them with a copy of any report resulting from the investigation - before taking any adverse action.
The FTC staff position, although not official FTC policy, is yet another reason for companies to investigate sexual harassment charges using their own employees.
Investigators, whether in-house or contractors, should be mindful that making notes on the basis of interviews can be dicey. Do they record exactly who said what or do they reflect the interviewer's personal judgment? Whenever possible, an employer should allow the complainant, the accused and any witnesses to prepare their own version of the facts, being as specific as possible. Then, have each of the statements prepared as a formal written declaration and submit the write-up to the parties and witnesses for review and signature.
Until Congress acts to clarify the right of employers to conduct appropriately thorough investigations without compromising essential lawyer-client privileges, company attorneys must discuss with their clients the extent to which, if at all, the attorney will participate in workplace investigations.