Considerations for Employers Investigating Allegations of Employee Discrimination

Background

Most employers are cautious when it comes to treating employees in a way that is, or could be misconstrued as, discriminatory. Even so, employee lawsuits alleging that their employer discriminated against them are now commonplace.

Whether discrimination claims are dismissed, settled or proceed to a formal litigation in court, the burden on employers of dealing with these claims can be significant. Employment discrimination claims are often complicated, time-consuming, and expensive. Moreover, employers must consider more than the monetary expense of defending against discrimination claims. They must also factor in the potential for damage to reputation, employee productivity and employee morale, which are often negatively impacted when an employer is accused of discrimination.

Employment discrimination is a legal minefield for employers. Under state and federal laws, discrimination is prohibited in every aspect of employment, including applications, interviewing, hiring decisions, promotions, raises, performance evaluations and terminations.

Legislators refer to protected characteristics, such as race, that employers are not allowed to consider when making certain employment decisions. While characteristics vary somewhat by the applicable law, common protected characteristics include:

race;
sex;
age;
disability;
color;
religion;
genetic information;
marital status;
sexual orientation; and
gender identity.

This article discusses some basic information employers should consider when responding to a charge of discrimination from a current or former employee. The article provides some basic background information on what an EEOC Charge is and the employer’s responsibility in responding to the charge. It also provides some guidance to consider as employers investigate and formally respond to allegations in an EEOC Charge.

EEOC Charges of Employment Discrimination

Before filing a case in a court of law, employees are required to first seek redress from a federal or state agency. The Equal Employment Opportunity Commission (“EEOC”) is the federal agency that is charged with hearing discrimination charges, and most states have their own equivalent agency. For example, in New York state, the New York State Division of Human Rights fills this role.

Once the employee formally files a charge with the EEOC (an “EEOC Charge”), the agency will notify the employer and ask the employer to provide a formal response to the allegations in the EEOC Charge. An EEOC Charge is a signed statement by the employee that an employer has engaged in discrimination. Typically, the EEOC Charge will lay out the employee’s allegations against the employer much like a formal complaint in state or federal court.

The EEOC may investigate the employee’s allegations, suggest that the parties attempt to resolve the dispute through a mediation, or propose its own resolution to the dispute. Often the employee, or more likely his or her counsel, is looking for the EEOC to issue a “right-to-sue” letter, which formally gives the employee the ability to file an action for discrimination in federal court.

After Receiving the Charge, Begin an Investigation into the Allegations

The most important thing to do when you receive an EEOC Charge is to take action. Far too often employers, because they do not know what to do, delay taking any action. A critical component to an effective response to an EEOC Charge is an initial investigation that gathers the necessary information from the right sources. Getting an early start will also keep your options open. For example, you may choose to resolve the matter privately with the employee or go to a more formal mediation. Having a solid understanding of the facts will allow the employer to make the best decision regarding a potential pre-suit resolution.

It is the employer’s responsibility to promptly and thoroughly investigate the allegations in the EEOC Charge. Time is of the essence. Employees’ memories fade over time, and failing to investigate promptly may force the employer to rely primarily on documentary evidence, which often may be limited and less comprehensive. In addition, a prompt investigation will ensure that the employer is complying with its duty to preserve relevant evidence.

Choose the Right Investigator

A critical step in the investigation is selecting the appropriate investigator. Employers who select the wrong investigator run the risk of compromising the integrity of the investigation before it begins in earnest. Moreover, the decisions made at this stage of the process may also impact whether the investigation is protected by the attorney-client privilege or work product doctrine. The investigator should be experienced and have an understanding of federal and state discrimination laws—often this is why employers choose to hire experienced counsel to conduct the investigation.

While it sounds obvious, the investigator should not be implicated in any of the underlying charges of discrimination. This issue may come up in smaller companies who do not have many choices for choosing an investigator from their current pool of employees. Employers should also be wary of using an investigator who is also an in-house human resources professional. Often in-house human resource professionals have had multiple interviews and other interactions with the accuser, and therefore may not be perceived by third parties as impartial.

Employers should also be aware that the investigator may be called as a witness if the matter proceeds to litigation. Thus, it is critical to choose an investigator who is competent, unbiased, knowledgeable, discreet and committed to the privacy of the employee bringing the charge and others.

Take the Proper Steps to Prepare for the Investigation

A key issue for employers is whether, and to what extent, the employer should inform other employees about the discrimination allegations. Clearly, certain of the employer’s human resource professionals and inside and outside counsel need to know. However, be wary of telling the employee-accuser’s manager, because doing so could risk the integrity of the investigation or increase the risk that the manager will retaliate against the employee-accuser, which can result in additional legal claims.

Further, prior to engaging in formal interviews, the investigator should have access to as many of the critical documents as possible. By reviewing the documents prior to the interview process, the investigator gains valuable perspective and can more efficiently tailor his or her questions during interviews.

Documents to consider collecting prior to investigative interviews include:

Personnel files of the accused, accuser and any potential witnesses;
Employment policies;
Employee performance reviews;
Communications that may be relevant (particularly those between the accuser and the accused);
Any relevant company complaint forms;
Transcripts from relevant anonymous complaint hotline;
Employer-created reports regarding the incident or the key individuals; and
Other relevant evidence.

Witness Interviews

A key component of any employment-related investigation is witness interviews. Conducting witness interviews early on in the investigation can provide invaluable information that may not be available in documents. Specifically, because charges of investigation are often predicated on workplace culture, interviewing employee-witnesses can provide valuable insight into the circumstances surrounding the allegations. In addition to employees, it is often good practice to interview witnesses who are not employees, such as former employees and vendors.

Other key considerations regarding the interview process include the sequence of interviews and pre-interview communications with witnesses. During the interview process, the investigator should focus by preparing an outline of the key topics that must be covered. Preparing an outline will allow the interview to proceed as efficiently as possible and lessen the business disruption caused by the investigation. However, the interviewer should be prepared to “go off script” as more information is learned about the situation.

As important as knowing what questions and topics must be covered is knowing what not to do in an interview. Every situation is different, but as a general rule, the interviewer should avoid asking accusatory questions that will put the interviewee on the defensive.

Guidance for Employers

Employee allegations of discrimination can be very disruptive both to the employer’s business operations, and the culture of the business. It is critical that employers take any claims of discrimination seriously and promptly investigate such claims—especially once the employer receives an EEOC Charge. The key to the success of any investigation is to choose the right investigator and systematically execute the investigation plan. If an employee files an EEOC Charge, the employer’s investigation efforts will pay off by providing a contemporaneous record of witnesses and other relevant documentation that can guide the employer on the allegations.

If you have questions or concerns regarding allegations of employee discrimination in your organization, please contact Christopher Dyess at cdyess@schlamstone.com.