Four Guidelines for Workplace Investigations to Help Small Businesses Avoid Lawsuits

Small Businesses should have policies prohibiting discrimination and harassment in the workplace. Under the discrimination laws, an employer who becomes aware of certain alleged workplace discrimination and harassment is required to investigate and take prompt, effective remedial action. Small business owners should conduct a timely, cost efficient and confidential internal investigation causing the least amount of disruption to the business responding to the problem without exacerbating the situation.  There are a variety of ways to investigate an employee complaint in the workplace, but following certain general guidelines can assist your small business in developing an investigation policy which should be part of a Small Business Employee Handbook.

Book about Anti - Discrimation Law isolated on wooden table.

Here are four guidelines to consider when investigating employee complaints:

  1. Develop Policies and Procedures for an Internal Investigation:

Establish policies and procedures for investigations so all investigations are uniform.  These policies and the procedures can be in a Small Business Employee Handbook.

An investigation into employee complaints must be done in a timely manner. The employer should start an investigation, talk to the complainant, alleged offender, any alleged witnesses, and reach a conclusion based on the investigation. This helps avoid many costly lawsuits filed by employees. The investigation process can also be set out in a Small Business Employee Handbook.

Most investigations should be concluded in less than thirty days.  There are rare circumstances where an investigation lasts longer, such as complaints involving documentation of FMLA violations or where there is a need to compile, review and analyze a large amount of documentation.  In those circumstances, the employee who made the complaint should be contacted every thirty days and notified the investigation is still on going.

When the investigation is concluded, notify the complainant the investigation was completed, and the matter handled appropriately based on the conclusions of the investigation.  If an investigation is inconclusive, provide an explanation of why further investigation is not merited or why the investigation is inconclusive. The more responsive the employer is in handling the complaint, the quicker the company can get back to its business.

An investigator needs to encourage cooperation. The investigation process is for the purpose of resolving a complaint and solving a problem. The employees need to know the process is to resolve legitimate complaints and not to make false claims or to retaliate against other employees. The investigator must create an atmosphere where employees feel it is in their interest to cooperate and to tell the truth.  All employees should be told the investigation is a company investigation, and failure to provide honest and truthful statements or to provide misleading information could lead to discipline.

  1. The Investigation Needs to be Confidential:

Make certain any investigation is done in a confidential manner. The witnesses should be told the investigation is confidential, they are expected to keep the investigation confidential, and that a breach of confidentiality can lead to discipline. The confidentiality requirements of the investigation process should be set out in your Small Business Employee Handbook.

All witnesses must be made aware of the importance of keeping the investigation confidential, and the ramifications in the event the investigation is not kept confidential. It is important that employees not gossip about the investigation or talk to each other to compare answers to the investigator’s questions.

The employee who made the complaint should be advised in writing that the employer is  investigating the complaint. It is important to tell an employee to keep the matter confidential, and not to speak to anyone other than an appropriate manager or union representative, but that you can’t guarantee complete anonymity. The employee can also be told any discipline issued as a result of the investigation will be kept confidential. Confidentiality is important in order to avoid claims of defamation and to ensure the integrity of the investigation by minimizing any disruption to the workplace.

All participants must be advised of zero tolerance for retaliation against someone making an allegation or against any other employee.  Inform employees that under no circumstance should employees retaliate against someone for making a complaint. The employees must be advised that if an employee feels retaliated against, or if an employee retaliates against someone else, they may be disciplined.

  1. The Investigator’s Report:

The investigator’s report should be a written report. This written report clearly states what was done to investigate the allegation and what conclusions and actions are to be taken as a result of the investigation.  Each step of the investigation needs to be documented by the investigator. Many managers who investigate employee complaints waste time talking to employees and never documenting anything that was said. The investigator needs to keep good notes documenting each step of the investigation in the report. However, the investigator’s notes should be separate from the final written report.

The report should include the following:  A summary of the allegations made; which witnesses were interviewed by noting who was present, including dates and position of the employees interviewed; a list of documents reviewed; an executive summary; the body of the report setting forth the facts and what the witness said along with conclusions for each allegation; and a summary of the findings.  Finally, the employer must document that it took appropriate remedial action if an allegation is substantiated.

An experienced investigator can best obtain facts by avoiding questions that are confrontational, argumentative, leading, judgmental or opinionated. The investigator should use open ended questions to allow the person to tell their side of the story.  The investigator needs to make sure they don’t get just one side of the story, but rather obtain responses to all allegations made.  It is helpful to have the complainant fill out a complaint form, however this is not mandatory.

Some investigators begin the interviews with the complainant. This may be appropriate if there is a written complaint, and the investigator knows what the issues of the complaint are. However, complaints are vague and broad in many situations. The complaint may say, “I was discriminated against by my manager when I was disciplined for my attendance.” In this example, it is helpful to interview any managers of the complainant first before actually interviewing the complainant, so the dates and policies involved are clearly defined.  It is also advisable to explain to the complainant that a follow-up interview may be necessary.  An experienced investigator should not disclose names or identities of witnesses being interviewed, or the order of the interviewees. The investigation should be done with as much discretion as possible.

An experienced investigator will take careful notes of each interview and ask questions several different ways to ensure each witness’s side of the story is fully understood. An experienced investigator will not assume the answer of the witness. It’s important to remember the investigation is to document what was said and to assist the company in resolving and documenting the investigation. The investigator who gathers the facts,  keeps everything in their head and then comes to you saying they solved the problem is of no help.  The investigation report should be kept in a separate file than the employee’s personnel file.

4. The Conclusion of the Investigation:

Six questions must be asked at the conclusion of the investigation. After reviewing an investigation file, these questions should be answered:

  • What were the allegations made by the employee?
  • What were the facts involved regarding each allegation?
  • Did the facts substantiate, not substantiate or was there not enough evidence to substantiate or not substantiate the allegations and why?
  • Were there any violations of company rules, policies or procedures?
  • What action was recommended and was that action taken?
  • If discipline action was taken, was the employee treated similarly to other employees in accordance with company policies and procedures?

Addressing these questions ensures that employees are treated in a consistent and fair manner.  If an employer makes a decision leading to a possible termination, it is advisable to have a manager outside the complaint review the file to determine whether these questions can be answered by looking at the file.

These are four important guidelines to consider when handling employee complaints. These are general parameters that – even if followed – will not guarantee that an employee who files a complaint would not sue the company.  But the company’s response to employee complaints can mean the difference between resolving an employment issue in a couple of months, or spending the next three years paying attorneys, and possibly a former employee, ten times what it costs to do an investigation of the complaint.

Contact John Holden of Holden Law Firm at (952) 943-3960 for answers to any questions you have regarding employee investigations, creating a Small Business Employee Handbook or assisting you with other employment law matters. John provides knowledgeable, practical and experienced legal counsel for employees and small businesses in the Twin Cities.

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