Evidence of an inadequate or biased investigation might be used to show malice or animus on the part of the employer
Workplace investigations – their impartiality, quality, findings and recommendations – play a central role in many cases under the Fair Employment and Housing Act (FEHA).
The FEHA requires employers to take reasonable steps to prevent unlawful discrimination, harassment and retaliation from occurring. Prompt, thorough and impartial investigations of workplace complaints are an important part of these obligations. In addition, employers are motivated to implement appropriate preventive policies and to investigate allegations of unlawful conduct as a means to reduce their potential exposure.
When representing current and former employees asserting claims under the FEHA, you will inevitably have cases where employers seek your client’s participation in their workplace investigations. Whether and how to participate will depend on many factors, including whether your client is a current employee, the status of the case and what you know about how the investigation will be conducted.
Once in litigation, an employer wishing to assert that it met its obligations under the FEHA by conducting an appropriate investigation will need to turn over to you its entire investigation file. You may be able to use evidence of an inadequate or biased investigation to discredit the investigation’s findings and, in some cases, to show malice or animus on the part of the employer.
Employers are required to investigate
Under the FEHA, an employer is strictly liable for acts of harassment by a supervisor. (Cal. Gov. Code, § 12940, subd. (j)(1); State Dep’t of Health Servs. v. Superior Court (McGinnis) (hereafter “McGinnis”) (2003) 31 Cal.4th 1026, 1041.) However, under the avoidable consequences doctrine, an employer may escape liability for certain damages if it can prove that: “(1) the employer took reasonable steps to prevent and correct workplace sexual harassment; (2) the employee unreasonably failed to use the preventive and corrective measures that the employer provided; and (3) reasonable use of the employer’s procedures would have prevented at least some of the harm that the employee suffered.” (McGinnis, supra, at p. 1044.) If the harassment is by anyone other than a supervisor, an employer will be held liable if it “knows or should have known of this conduct and fails to take immediate and appropriate corrective action.” (Cal. Gov. Code, § 12940, subd. (j)(1).)
In addition, the FEHA requires employers to take all reasonable steps necessary to prevent harassment, discrimination and retaliation from occurring. (Cal. Gov. Code, § 12940, subd. (k).) (Although the actual text of the statute refers only to discrimination and harassment, retaliation is a form of discrimination such that failure to prevent retaliation is actionable under section 12940, subdivision (k). (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1240, disapproved on other grounds in Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) (For the purposes of this article, the term “discrimination” also includes harassment and retaliation.) Although section 12940, subdivision (k) creates an independent cause of action for “failure to prevent,” an employee can only prevail on such a claim if he prevails on the underlying claim (e.g., discrimination). (Dickson v. Burke Williams, Inc., —— Cal.Rptr.3d ——, 2015 WL 1020874 (Mar. 6, 2015).)
Title VII of the Civil Rights Act of 1964 imposes vicarious liability for a hostile work environment (e.g., sexual harassment) created by a supervisor. However, an employer may be able to avoid liability or limit damages for a hostile work environment if it can establish: (1) “that the employer exercised reasonable care to prevent and correct promptly any . . . harassing behavior,” and (2) “that the plaintiff employee unreasonably failed to take advantage of any preventing or corrective opportunities provided by the employer or to avoid harm otherwise.” (Burlington Industries, Inc. v. Ellerth (1998) 524 U.S. 742, 765; Faragher v. City of Boca Raton (1998) 524 U.S. 775, 807.)
Employers who seek to rely on workplace investigations as a defense to an employee’s claims of discrimination cannot shield the investigation and related documents from discovery by asserting the attorney-client privilege or work-product doctrine, even if the investigator was an attorney. Wellpoint Health Networks, Inc. v. Superior Court (hereafter “Wellpoint”) (1997) 59 Cal.App.4th 110, 128 held that an employer invoking an investigation defense “will have put the adequacy of the investigation directly at issue, and cannot stand on the attorney-client privilege or work-product doctrine to preclude a thorough examination of its adequacy. The defendant cannot have it both ways.”
Thus, in litigation, unless it turns over in full the investigative report and all supporting documents, including interview notes and recordings, the employer will be precluded from arguing that it conducted any investigation at all.
Evidence of pretext for discrimination or retaliation
Employees can point to inadequate or flawed investigations as evidence of pretext for discrimination or retaliation. Investigations are a double-edged sword. If the employer fails to conduct a proper investigation, the employee-plaintiff can use the lack of a rigorous investigation as powerful affirmative evidence of the employer’s animus. Further, a failure to properly investigate can evidence malice or show that the employer ratified the discriminatory conduct so as to support punitive damages.
A recent case, Mendoza v. Western Medical Center Santa Ana (hereafter “Mendoza”) (2014) 222 Cal.App.4th 1334, is instructive.
Romeo Mendoza sued his hospital employer (“Western Medical”) alleging that he was terminated in retaliation for reporting sexual harassment. Mendoza was a 20-year veteran of the hospital with undisputedly excellent performance.
When a new per diem House Supervisor (Del Erdmann) was hired, he became Mendoza’s supervisor. Mendoza and Erdmann are both gay men. When Mendoza complained to a different House Supervisor that Erdmann was sexually harassing him, the complaint was passed up the chain of command and investigated.
Mendoza asserted that Erdmann harassed him by making numerous explicit comments, engaging in physical contact, and exposing himself to Mendoza. Mendoza alleged that all of this conduct was unwelcome, that he had told Erdmann to stop, and that he had never engaged in flirtatious or lewd conduct with Erdmann. The final straw occurred when Erdmann exposed himself to Mendoza a second time and said, “I know you want this in your ass.” Erdmann, in turn, claimed that the conduct was consensual.
The company investigated and concluded that both men had willingly participated in inappropriate and unprofessional behavior. Both were fired.
A jury found in Mendoza’s favor, awarding him $238,328. But, the Court of Appeal determined that a new trial was necessary because the jury was improperly instructed as to the correct legal standard on causation.
Of relevance here, the employer argued that it was entitled to entry of judgment in its favor because there was insufficient evidence to support the jury’s conclusion that it fired Mendoza in violation of public policy. The employer argued that it fired Mendoza because it believed that he willingly engaged in sexual conduct with his supervisor, not because of his harassment complaint.
Nonetheless, the Court of Appeal found there was sufficient evidence that a substantial motivating reason for Mendoza’s firing was his report of sexual harassment. Western Medical fired an excellent, long-term employee soon after he complained about sexual harassment. In addition, accepting as true the testimony from Mendoza’s expert, there were numerous shortcomings in the investigation conducted by the employer following Mendoza’s complaint:
Defendants did not prepare a formal investigation plan. Defendants did not take written statements from Mendoza or Erdmann. Defendants did not immediately interview Erdmann, and suspended the investigation while Mendoza missed work for several weeks following a bicycle accident. When Mendoza returned to work, Mendoza and Erdmann were interviewed simultaneously rather than separately. Defendants did not interview anyone other than Mendoza and Erdmann (such as coworkers who might provide insights as to the credibility of the two men). The individual charged with completing the investigation was not a trained human resources employee, but was instead the supervisor of Erdmann and Mendoza.
(Mendoza, 222 Cal.App.4th at p. 1337.)
In language that will surely be quoted in many plaintiffs’ briefs, the Court of Appeal stated, “[t]he lack of a rigorous investigation by defendants is evidence suggesting that defendants did not value the discovery of the truth so much as a way to clean up the mess that was uncovered when Mendoza made his complaint.” (Id. at pp. 1344-45.) “Thus, on remand, it will be up to a jury to decide whether the expert’s characterization of the investigation is accurate and whether to infer from that characterization that defendants had retaliatory animus.” (Id. at p. 1345.)
Challenging an investigation
A number of California cases that have discussed workplace investigations have touched upon the adequacy of investigations, including Cotran v. Rollins Hudig Hall Int’l, Inc. (1998) 17 Cal.4th 93, Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256, Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, and, of course, Mendoza. Further direction can be found in the EEOC Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors (June 8, 1999). (Available at http:// www.eeoc.gov/policy/docs/harassment.html.) In addition, the Association of Workplace Investigators (AWI) publication, Guiding Principles for Investigators Conducting Impartial Workplace Investigations, lays out eleven principles that reflect best practices for workplace investigations. (Available at http://www.aowi.org/assets/ documents/guiding%20principles.pdf.) The publication does contain a caveat that investigators may determine it necessary or desirable to deviate from these principles, and that such deviation does not necessarily mean that the investigation was inadequate. However, unless an investigator can provide explanations for any deviations, you can point to those deviations to show that the investigation was flawed.
Depending on the importance of the investigation in the case – and your litigation budget – you may consider hiring a Human Resources expert to explain to the jury why the employer’s workplace investigation and responses to your client’s complaints were flawed and inadequate.
The following factors, though not exhaustive, serve as a good starting point:
• Timing of investigation
Did the employer promptly investigate the allegations after it learned of them? An employer is required to act promptly in conducting its investigation, even if the employee did not make a formal complaint. Failure to do so may call into question the employer’s motivations for later initiating an investigation.
• Improper investigator
Was an appropriate – i.e., neutral – investigator with proper training regarding how to conduct workplace investigations selected to conduct the investigation? The investigator must be impartial so that a neutral, objective investigation can be conducted. The investigator should not have been involved in the underlying conduct that was complained about. Moreover, the alleged wrongdoer should not have supervisory authority over the investigator or control over the investigation.
If the investigator does not work for the employer, there are strict requirements that they be either an attorney or private investigator. (Bus. & Prof. Code, §§ 7522, subd. (e), 7523; Harris and Tuft, Attorneys Conducting Workplace Investigations: Avoiding Traps for the Unwary (2011) 25 Cal. Labor & Employment L. Rev.) If the investigator is the employer’s regular outside counsel, that can be a basis to challenge his or her impartiality as the investigator then has a conflicting obligation to be loyal to (and zealously advocate for) the employer client. (Woolley and Robbins, This Is Not Your Father’s (or Mother’s) Investigation: How Workplace Investigations Have Changed Over the Past 10 Years (2014) 28 Cal. Labor & Employment L. Rev 2.)
• The employer improperly limited or controlled the investigation
Did the employer define the scope of the investigation in an overly narrow way? Did the employer limit access to witnesses or documents? Did the employer instruct the investigator to make only limited findings or not make conclusions? This affects the integrity of the entire investigation.
• Absence of a thorough investigation
Did the investigator interview the appropriate witnesses, including the ones who may have corroborated the complaining employee’s account of events? Did she examine the appropriate documents? Did she ask witnesses about whether they knew of other witnesses or documents? The EEOC Guidance offers good examples of questions that should be asked.
• Flawed conduct of the interviews
How were the witnesses interviewed? Was the investigation conducted such that the witnesses were encouraged to speak freely? Were they asked open-ended, nonleading questions, or were words put in their mouths? Were witnesses interviewed in private or were others present who had the ability to intimidate or embarrass them? Was the investigation designed such that credibility could be properly evaluated? (For example, key witnesses should be interviewed in person if possible.)
• Failure to create and maintain the appropriate documents
Did the investigator take detailed, contemporaneous notes or tape record the interviews to ensure that their records were accurate? Did they maintain those records? Were any written or recorded witness statements taken?
• Failure to allow the employee to respond to negative information
In Silva v. Lucky Stores, Inc., supra, the court pointed out, with approval, that the investigator “provided the critical witnesses with an opportunity to clarify, correct or challenge information provided by other witnesses which was contrary to their statements or which cast doubt on their credibility. After interviewing all the other witnesses, [the investigator] gave Silva a final opportunity to comment on the information he had gathered.” (65 Cal.App.4th at pp. 272-73.)
• Failure to make factual findings or credibility determinations
An investigator cannot simply throw his hands up and conclude that it is a “he said, she said” situation. Even if the investigator has diametrically opposed accounts from the complainant and alleged wrongdoer and no corroborating evidence, the investigator still has at his disposal other tools to determine credibility and reach conclusions about what actually happened. Among other things, he can look at which person’s account has inherent plausibility, which person’s account is more internally consistent, witness demeanor, whether anyone has a motive to lie, whether any person is known to have been untruthful in other situations and whether the alleged harasser had a history of similar behavior in the past. (Cf. Cal. Evid. Code, § 780 (listing factors to consider in determining whether a witness is credible).)
• Conclusion not supported by substantial evidence
The investigator’s findings and conclusions must be supported by substantial evidence. (See, e.g., Cotran v. Rollins Hudig Hall Int’l, Inc., supra, 17 Cal.4th at p. 108.) Determine whether the investigator’s report demonstrates that she considered the evidence and came to a logical conclusion based on that evidence.
Investigating complaints by a current employee
When a current employee complains about discrimination, the employer will likely initiate an investigation. If you are representing such an employee, you must consider your involvement in the process and the implications for your client’s case.
• Ask to be present during your client’s interview
If the employer seeks to interview your client, you should ask to be present. If the interview is being conducted by someone from the company’s human resources department or management (a non-lawyer) and is not directed or controlled by counsel, they may refuse your participation. However, if the investigator is an attorney, rule 2-100 of the California Rules of Professional Conduct, which prohibits communication with a represented party, is triggered. The attorney investigator will likely be aware that interviewing the complaining employee outside of the presence of her attorney without permission may constitute impermissible ex parte contact under rule 2-100. Thus, you can insist that your client can only be interviewed by an attorney investigator in your presence. Note that this restriction does not apply to a licensed private investigator (for whom there is no issue of privilege), provided that the private investigator is not working at the direction/control of counsel.
• Avoid becoming a witness
One concern is that by participating in the interview process, you may be a potential witness in the event of a dispute as to what was said or done during the interview. Rule 5-210 of the California Rules of Professional Conduct prohibits an attorney from serving as both an advocate and witness in a jury trial, unless the testimony relates to an uncontested matter, the testimony relates to the nature and value of legal services rendered in the case, or the attorney has the informed, written consent of the client. Even with client consent, it would be disruptive to have to testify as a witness in a case where you are trial counsel.
The deposition of trial counsel is permissible only where “(1) no other means exist to obtain the information than to depose opposing counsel; (2) the information sought is relevant and not privileged; [and] (3) the information is crucial to the preparation of the case.” (Spectra-Physics, Inc. v. Superior Court (1988) 198 Cal.App.3d 1487, 1496.) The best way to prevent yourself from becoming a witness is by getting the employer to agree that your client’s interview will be recorded. This way, an independent record of the interview exists and you do not risk being called to testify. Make sure to bring your own recording device (these days, a smartphone will probably suffice). Alternatively, you can have another person attend the interview on your behalf. The discussion for rule 5-210 makes clear that the rule is “not intended to apply to circumstances in which a lawyer in an advocate’s firm will be a witness.” Thus, another attorney at your firm or a professional colleague you trust can cover for you.
Also, be sure communications are written, not oral. Doing so, and recording the substance of any witness interview you attend, will ensure that other means exist to obtain the information such that it would be improper to force you to testify.
• Consider drafting a letter that lays out the facts
It is up to the investigator to ask the questions that he or she sees fit. There is a risk that an investigator may not thoroughly explore an important area of inquiry. One way to ensure that no important facts are overlooked is to prepare or ghostwrite a letter for your client to give to the investigator, laying out all of the important events that have happened.
• Fully prepare your client
Just as you would never let your client be deposed without ample preparation, you must prepare your client in advance to tell her story in a compelling manner. Be sure to explore all anticipated areas of inquiry, including those in any letter(s) to the employer.
• Avoid directing the testimony
An attorney should avoid injecting himself too much into the investigation, lest he be accused of obstructing the interview or, worse, advising the unrepresented employer what to do if a non- lawyer is investigating. Instead, the attorney should take a backseat, intervening and objecting only when necessary, as when the interviewer tries to delve into attorney-client communications or areas protected by a right to privacy. That said, under certain circumstances, you may conclude that the client has failed to cover important facts or a key follow-up question was not asked. You may wish to politely intervene with the permission of the investigator to elicit that information.
Even if the employer learns of the alleged wrongdoing only after the employee leaves the company, the employer still had a duty, including to its other employees, to conduct its investigation. Thus, it is not uncommon for an employer, upon receiving a demand letter from an attorney, to begin conducting a workplace investigation. The employer or their outside investigator will likely reach out to you or to the employee and ask for an interview.
At this point, you have more bargaining power with respect to your client’s participation because it is completely voluntary on her part.
Many plaintiff-side employment lawyers will not permit their clients to participate in post-termination investigations under any circumstances. They believe that no good can come of it. Often, their reasoning is:
• The employer had its chance to conduct an investigation, but did not do so until after counsel became involved.• The odds that the investigation will be biased and come out against the client are high, so why participate in a sham investigation?• The employer is trying to get free discovery from the employee – why give them access to her?
Nonetheless, the decision regarding whether to participate in a post-termination workplace investigation must be carefully considered. The strongest argument in favor of cooperation is that, if you do not cooperate, you may be giving the defendant ammunition to argue that it tried to do the right thing, but the former employee did not care enough about the truth to participate. If the request for participation in an investigation is made pre-litigation and an employer can legitimately assert that this was the first it learned of the alleged unlawful action, this argument carries weight. In contrast, the argument can readily be countered if the employee previously complained about the unlawful conduct and those complaints fell on deaf ears until after either litigation or a DFEH or EEOC investigation has occurred.
• Communications regarding the investigation
Consider that your communications with the employer or its counsel regarding your client’s participation in the workplace investigation may well be admissible at trial. Therefore, you may wish to convey that, while the employee has no legal obligation to participate in a post-termination investigation, she is willing to do so because she wants the employer to take corrective action and ensure that remaining employees are protected from unlawful conduct. But, she will only participate in the process if it is a fair, transparent and impartial one. If, in the end, the client does not participate in the investigation because it is biased/flawed, she can explain why she refused to participate.
• Asking to jointly select the investigator
Some plaintiffs’ attorneys will try to have a say about the identity of the investigator. Proceed with caution before trying to influence the selection process because your participation may give legitimacy to the investigation findings. If that person conducts a flawed investigation and finds that the employee’s complaints are unsubstantiated, the employer has ammunition to argue that the employee’s own attorney found that person trustworthy and that any objections now are sour grapes. That said, you may wish to learn the identity of the investigator before agreeing to your client’s participation. If the investigator is someone with a reputation for being fair, you may be more agreeable to participation than if you learn that she is someone with a history of biased determinations.
• Asking for waiver of the attorney-client privilege in advance
A plaintiff’s attorney can ask the employer to make a Wellpoint election as a condition of the employee’s participation. Most employers are not going to be willing to make that election in advance, lest they be forced to turn over potentially damaging information. Certainly, there is no legal requirement that they make that election in advance. In fact, under most circumstances, a wise defense attorney will advise the employer against taking such a risk.
But, by refusing to make that election in advance, the employer is essentially saying, “If the results are favorable to me, I will waive the privilege to get the information before the jury. If they are unfavorable, I will block the employee from getting corroborating information and block the jury from hearing the truth.” If the employer refuses to make the Wellpoint election and you do not participate in the investigation, you can persuasively argue that this was a self-serving investigation concerned about protecting the employer, not uncovering the truth.
• Asking for the investigation documents
While the employer is under no obligation to share the investigator’s notes, reports, conclusions and investigative file, it does not hurt to ask that they be provided at the conclusion of the investigation. Again, this will be a point of resistance, but one you can point to if you choose to decline participation. You can then argue that the reason the employer refused to turn over this information was to protect itself from revealing information that might corroborate the employee’s claims or prove the biased intent of the investigation.
Some employers are willing to share, in exchange for the plaintiff’s participation, the ultimate report, even if they hold back the supporting documentation. Getting this information prior to litigation can be of tremendous benefit. If your client’s complaints were substantiated, your valuation of the case is revised accordingly and you will have an employer who is highly motivated to settle. Even if your client’s complaints are not substantiated, you can get a sneak peek at what witnesses may say at trial (or, at the least, the defense’s perspective on what those witnesses will say).
• Tape recording the interviews
Ask that all interviews be recorded. If they are, and a Wellpoint election is made, those recordings can make your case. This author had a case in which the investigator’s summary of what a key witness said (and the findings in the report) differed drastically from the witness’s taped statements. This called into question the integrity of the entire investigation. Similarly, recordings capture nuances such as tone of voice, give you accurate records of what was said, prevent bullying and intimidation, and allow you to determine the propriety of the interviewer’s techniques.
At the least, you should consider asking that the employee’s interview be recorded. On the one hand, it may later be used by the defense to impeach your client in the event of inconsistencies. On the other, it ensures that words are not put into your client’s mouth and that a potentially hostile interview is memorialized. Furthermore, it ensures that you do not become a witness with respect to the investigation simply because you were there.
When representing plaintiff employees, you will inevitably have cases in which workplace investigations will play a central role. You will want to make an informed decision about whether to have your client participate and under what circumstances.
Ramit Mizrahi is the founder of Mizrahi Law, APC, where she represents employees exclusively. Ms. Mizrahi graduated from Yale Law School. She has a master’s degree in Gender & Social Policy with merits from the London School of Economics and a bachelor’s degree with highest honors from UC Berkeley’s Haas School of Business. Ramit is Chair-Elect of the State Bar of California’s Labor & Employment Law Section and serves on the LACBA Labor & Employment Law Section. She was selected for the Top 100 Super Lawyers Southern California Rising Stars list for the second year in a row.
Copyright © 2020 by the author.
For reprint permission, contact the publisher: Advocate Magazine