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Conducting a Good-Faith Workplace Investigation

Employers all know the importance of investigating allegations of misconduct, discrimination, and harassment in the workplace. But even so, that practice sometimes falls by the wayside when times get busy. Here’s a look at a recent Tenth U.S. Circuit Court of Appeals decision on workplace investigations.

Workplace Investigations: The HR Manager’s Step-by-Step Guide

Making mischief — allegedly
Everett Young, an African American, worked as an investigator into store thefts at Dillon Companies’ King Soopers grocery stores in Colorado. According to his employer’s timekeeping procedures, he was supposed to complete all time records in a manner that reflected the true hours he worked. His shift was supposed to run from 2:00 p.m. until 10:30 p.m.

Dillon began investigating Young because of allegations that he was abusing telephone privileges during work hours. Its investigation included reviewing store security videos. As part of that review, his supervisor, Jon Lesley, saw images on the videos indicating that he left the store two hours before the end of his shift on January 11.

Lesley investigated further by examining Young’s timekeeping records. He was supposed to “punch out” at the end of every shift through an electronic timecard system and record his hours in a transfer log on the last day of each workweek.

Lesley’s review of the time records showed that Young didn’t fill out his transfer log until the day after his last day of the workweek, when he recorded a full shift for January 11.

Lesley also interviewed an administrative assistant at Young’s home store who said the timecard system didn’t show a departure time for 10:30 p.m. on January 11. That indicated to Lesley that Young didn’t punch out that day. Instead, he misrepresented the time he had worked on his weekly transfer log.

Lesley interviewed Young to get his version of events. Young denied leaving early and claimed he punched out at 10:30 p.m. At the time, he didn’t produce any other evidence to explain the video showing him leaving early or refute his supervisor’s evidence that he hadn’t punched out at the end of his shift.

Lesley reported his findings, including Young’s version of events, to his supervisor, the director of security, who then discussed the situation with the manager of labor and employee relations.

Based on the investigation, they determined that Dillon should fire Young for “theft of time,” or seeking pay for time he didn’t actually work.

Audio Conference: Initiating An Internal Investigation: Keep Employee Complaints From Landing In Court

I ain’t misbehavin’
Young sued Dillon, claiming he was fired because of his race in violation of Title VII of the Civil Rights Act of 1964. Dillon replied that race had no part in its decision, pointing to the investigation and the evidence it produced.

To avoid dismissal of his Title VII claim at that point, Young had to produce evidence showing that the reasons his former employer gave for firing him lacked credibility or were unworthy of belief.

During the discovery phase of the litigation (the pretrial exchange of information), Young produced evidence that although he hadn’t punched out at 10:30 p.m., he had punched out later at 11:58 p.m. He claimed that he realized he forgot to punch out after he arrived home and he then returned to the store to do so.

As for the video showing him leaving two hours before the end of his shift, he said that he had walked outside to check on the security of gas tanks stored behind the building. In essence, he was telling the court that Dillon was wrong in determining that he had sought to be paid for time he hadn’t worked.

He admitted, though, that he had never shared any of that information with his employer before his termination.

Internal Investigations: A Practical Training Course for HR

Good-faith investigation saves the day
When the case reached the appellate level, the Tenth Circuit decided that Young failed to show any discrimination by his former employer. The court acknowledged that the evidence he produced during the litigation might very well cast doubt on Dillon’s conclusion that he left his shift early.

But, the court said, there was no evidence that the company knew at the time it fired him that he had come back to punch out. In other words, Dillon had a non-discriminatory reason for terminating him — seeking payment for time he hadn’t worked — and he didn’t produce any evidence that it had manufactured that evidence to cover up discrimination.

According to the court, the question isn’t whether the employer was correct in determining that the employee misbehaved; the question is whether it made a good-faith effort in its investigation.

The court has to look at the facts at the time and under the circumstances of the termination to see if there’s a good-faith basis for the decision, not the facts in hindsight as they’re unearthed during litigation. So an employer can reach the wrong conclusion in an investigation into whether there was misconduct and not be liable for discrimination so long as it performed its investigation in good faith.

Audio Conference: Addressing Employee Complaints: How Supervisors Can Sidestep Legal Dangers

Tips for performing workplace investigations
Here are some things to keep in mind when you investigate allegations of employee misconduct:

  • Have a neutral person perform the investigation. If an employee has made accusations of bias or discrimination against a supervisor, that supervisor shouldn’t be the person heading up the investigation.
  • Check all sides of the story. Get the accused’s side as well as the victim’s (if the allegations involve harassment). Get any witness’ versions of the events.
  • Check any documents that might back up or refute the witness’ statements.
  • Take notes — and keep them.
  • Present the investigation results to someone higher up — like a manager who will make the final decision. One of the factors in the employer’s favor in this case was that the investigator showed all the facts — both the evidence of misconduct and Young’s version of events — to his supervisors. Those supervisors made the ultimate decision, and there was no allegation that they had any discriminatory motives against Young.
  • Preserve any evidence you find at least until the statute of limitations has run on claims of discrimination, public-policy violations, or statutory claims (for example, Family and Medical Leave Act (FMLA) or Fair Labor Standards Act (FLSA) claims) — usually at least two years.