May 27, 2014

50 for 50: Five Decades of the Most Important Discrimination Law Developments

Number 11: Workplace Investigations and the Good Faith Standard

Allegations of employee misconduct – particularly as they relate to claims of discrimination and harassment – have been raised in the workplace ever since the Civil Rights Act was passed.  But human resource executives were not originally trained to be workplace investigators.  They already had a panoply of legal requirements to maintain.  With the Civil Rights Act came the new challenge of figuring out an effective way to objectively investigate these claims while at the same time minimizing the risk of possible litigation. 

Until the California Supreme Court case in Cotran v. Rollins Hudig Hall International, Inc., 17 Cal. 4th 93; 69 Cal. Rptr. 2d 900 (2002), it was not at all clear what standard of proof employers would be held to in determining whether disciplinary action could be taken in conjunction with such allegations.  That issue was resolve by the California Supreme Court in the Cotran case.  This decision has been followed by courts throughout the United States.  In Cotran, the Court was faced with the issue as to whether or not in a “he said, she said” allegation, the HR department had to be absolutely certain that an act of harassment or discrimination occurred before it could take disciplinary action against the accused.  The Court recognized that employers were caught between a rock and a hard place:  if they sided with the victim, they were subject to a possible wrongful termination action brought by the accused; if they sided with the accused, they faced the likelihood of being sued by the accuser for failing to take appropriate action to address the misconduct.  In this significant ruling, the Court determined that an employer in such a situation was not required to establish that the ultimate decision it made was the correct one, only that it was based upon a good faith investigation and a reasonable conclusion.

The importance of this ruling is that it established for the first time that HR executives must have competent and well-trained investigators who understand the process necessary to meet the Court’s ruling.  These investigations must be conducted by an objective investigator who is beyond reproach.  The investigation must be thorough and complete and the conclusion must be based upon logic and reason.  This decision demonstrates the importance of ensuring that every employer have at least one individual who has been properly trained on how to conduct these investigations.  If an investigation meets this standard, the chances of actually being embroiled in a lawsuit brought by the accuser or the accused is extremely unlikely.  And should a lawsuit be brought by one of these individuals, meeting this standard of care makes it extremely unlikely that any such lawsuit will result in liability.


Category: EEO,