Avoiding the HP Syndrome When Investigating Misconduct With the added attention to corporate investigations generated by the Hewlett

Packard scandal, employers must re-focus on the proper handling of internal investigations of misconduct. An effective investigative process will protect the company from liability as well as promote employee morale.

By Jason E. Reisman

Whether allegations of sexual harassment, stealing or simple policy violations are involved, employers are faced with the dilemma of how to respond. Employers increasingly place themselves in harm's way by rushing the process and skipping steps when confronted with such situations or by employing unethical tactics.

Rather than taking the time to strategize and utilize the all-important "process" or "means" of an investigation, employers often jump to conclusions and seek to quickly get to the "ends."

Unfortunately, the failure to take a step back and strategically, methodically investigate an issue before meting out discipline, for example, can ultimately result in a substantial risk of liability in a subsequent lawsuit.

Investigations, though time-consuming, must be standard protocol in today's workplace. The importance of incorporating investigations into the fabric of the workplace is on par with conducting them efficiently, ethically and within the confines of the law.

Though normally conducted behind the scenes without much fanfare, internal investigations recently came to the forefront of corporate America's thought with the intense media scrutiny of Hewlett Packard's efforts to identify the source of a media leak emanating from its board of directors.

By most news accounts, HP employed controversial and possibly illegal practices in its investigation to find the leak, including spying on its own directors and duping phone company or financial institution employees into revealing someone's private information. HP's investigation did identify the source of the leak, but also has led to a formal inquiry by the SEC, several criminal indictments, and undoubtedly a tarnished reputation.

The company agreed in December to pay $14.5 million to settle a civil lawsuit filed by California's attorney general that charged the company with unlawfully obtaining phone records as part of its investigation. Criminal charges filed by the attorney general's office against former HP chairwoman Patricia Dunn and four others are pending.

Today's employers are in need of a stern reminder of the importance to "investigate, investigate, investigate," especially amid the incredible, continuing boom in workplace harassment claims. The most prevalent of those claims continues to be harassment, which continues to grow at a record pace -- especially since the events of Sept. 11, 2001, which generated a significant increase in claims of religious and national origin backlash discrimination and harassment.

Though Equal Employment Opportunity Commission statistics confirm the sustained growth in workplace harassment, the statistics alone fail to portray the true explosion, as countless incidents are handled internally and never reach the EEOC, state agencies or the court system.

Different Kinds of "Truths"

Employers use internal investigations in an effort to find "the truth" -- who did what to whom. The quest for the truth can be an all-encompassing, consuming effort, but there can be different kinds of "truths" sought.

For example, for HP, the "truth" being pursued was the identity of the board member leaking information to the media. HP sought the "real" truth -- that is, the identity of the source of the leak, which led to deceptive, unethical, and arguably unlawful practices.

To HP's board of directors, the investigation would fail if the source of the leak was not identified. That pressure for an absolute result, the "real" truth, caused the orchestrators of the investigation to ignore the professional bounds of investigating.

In harassment investigations, however, the "truth" being sought is "a" truth, but not necessarily the "real" truth. From both legal and practical business standpoints, which may not always overlap or be intertwined, an employer need not find the "real" truth.

Instead, the process of the harassment investigation is at least as important as the result. The "process" involves conducting an immediate, thorough internal investigation. The "result" is making a good-faith determination about what happened based on the information gathered during the investigation.

Though a definitive result or conclusion will be reached, the "real" truth may not be discovered -- amazingly, that fact is somewhat unimportant in the harassment setting.

A Good Faith Belief

Under the law, the investigation process is paramount when a company defends itself against discrimination and harassment lawsuits. This is because of what has become popularly known as an employer's "good faith belief" defense.

This concept, developed by courts around the country, offers a virtual bulletproof defense to any type of wrongful-discharge claim. The defense operates as follows: If an employer conducts a timely, thorough investigation of the harassment situation and takes remedial action to discharge an employee whom the employer in good faith believes acted inappropriately, the courts will not second-guess the employer -- in essence, the employer's decision will be protected and upheld.

On the flip-side, even where an employer investigates and cannot substantiate allegations of harassment, that same investigation process will be used successfully by the employer to defend against any harassment lawsuit filed by the complaining employee.

From the practical business standpoint, or what is referred to as the "employee relations" view, how important is the "real" truth? In reality, the answer is, "not very important."

The bottom line is that employee relations success involves rooting out the so-called "evil" of harassment or discrimination. Of course, the primary means to achieve such success is identifying the harassers and eliminating them and their conduct from the workplace.

More often than not, however, an employer cannot definitively identify or be "certain" it has found the harasser.

Therefore, demonstrating a properly conducted investigation and implementing swift and effective remedial action (when needed), to both eliminate the harassment and prevent future recurrence, is the best alternative.

Although not necessarily the same as catching a guilty harasser, the investigation process serves as an obvious deterrent, especially to the harasser who is not caught, because it demonstrates that the employer: (1) has an anti-harassment policy, (2) adheres to its policy, (3) takes harassment issues seriously and (4) will act to address situations without hesitating and will implement measures designed to root out harassment and eliminate it.

The "employee relations" perspective is often more important than the legal perspective because it transcends the routine legal issues of liability and damages, and encompasses a more workplace-centric analysis. "Employee relations" incorporates concepts such as building and maintaining employee morale and the enhancement of employee/management relations.

Morale and Loyalty Issues

Whereas the HP investigation failed on several levels, an employer faced with a complaint of harassment can ensure success. Not only did HP compromise the integrity of its investigation internally with, at best, questionable tactics, it caused morale and loyalty issues and the potential serious deterioration of internal employee and executive relations.

HP's controversial investigation will have long-lasting implications for corporate America and potential criminal consequences for HP's current and former executives and agents.

Attentive employers can avoid such failure by focusing on the process, by conducting a thorough investigation, such as these basic steps:

* Be open to, and encourage complaints of harassment, discrimination or other inappropriate conduct.

* Treat all complaints seriously.

* Immediately investigate all such complaints by interviewing the complaining employee, the alleged harasser and all potential witnesses.

* Document the investigation interviews.

* Review personnel files and other relevant company documents for the involved employees, looking for an indication, for example, of potential improper motives or prior history of similar problems.

* Evaluate the information gathered, make a determination about what is

believed to have happened (i.e., what your perception of the "real" truth is) based on that information and document the determination.

* If needed, implement (and document) remedial measures designed to eliminate the existing problematic conduct and prevent similar conduct in the future.

* Communicate the results of the investigation to the complaining employee and alleged harasser.

* Follow-up to ensure "workplace healing," including checking in periodically with the complaining employee and the alleged harasser (if still employed), and monitoring the ongoing workplace relationships, productivity and morale that may have been affected.

Following this simple framework alone ensures "success" on both a legal and employee-relations level, without having to employ any questionable or controversial tactics and without actually having to find the "real" truth.

The Value of Investigations

Important issues in the workplace arise and require attention on a daily basis. Some situations, such as harassment complaints or other workplace misconduct, will require a full-blown, in-depth investigation. Other minor incidents, such as a short but heated verbal exchange or sarcastic comment between co-workers, also require an investigation, but on a lesser scale.

Regardless of the severity of the incident or situation, the key is undertaking an investigation. Properly conducted, timely investigations, from a legal standpoint, serve essentially to provide a cloak of invincibility to an employer that is subsequently sued for harassment or wrongful discharge.

From the employee-relations perspective, the incredible impact of such an

investigation upon employee morale and productivity as well as confidence in, and trust of, the management team cannot be underestimated. Though the quest for "the real truth" may ultimately fail, the value of the investigation transcends that quest.

Jason Reisman isa partner in the Philadelphia-based law firm of Obermayer Rebmann Maxwell & Hippel LLP, where he specializes in all aspects of labor relations and employment law and exclusively represents management. His e-mail address is JR@Obermayer.com