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Missteps in Internal Employment Investigation Prove Costly for Employer

employee-investigationWhen an employee complains of sexual harassment in the workplace, it is best practice to conduct an internal investigation. A recent case from the Second Circuit provides a cautionary tale of how NOT to handle an internal HR investigation.

Summary of the facts

The case, Vasquez v. Empress Ambulance Service, Inc., involved a “he said-she said” sexual harassment allegation. These were the facts in the Complaint. Andrea Vasquez, an EMT working for Empress, kept receiving unwanted advances from her co-worker, Tyrell Gray, while at work. He repeatedly asked her out on dates, and placed his arm around her whenever he had the chance. The behavior escalated several months later when Gray sent Vasquez a sexually explicit photograph in a text message. She immediately reported the text message to her supervisor, who encouraged her to file a formal complaint. In fact, management suggested that she sit down at a computer that moment and begin the process.

While Vasquez was drafting her complaint, Gray walked in to see her crying and typing at the computer. He asked whether she was reporting him; she avoided engaging in any conversation with him. Gray caught on quickly that he was likely to be in serious trouble for his behavior, and from there, he developed a plan. He asked another co-worker to lie about the relationship and tell management that Vasquez and he had been in a romantic relationship. He went back into his cell phone and fabricated evidence to make it look like Vasquez had been involved with him in a romantic relationship, and had also sent him a suggestive photograph. He then printed out screenshots from his phone of the fabricated text messages and had them at the ready.

The employer approached Gray and confronted him about the allegations. He responded by turning over the printed out cell phone screen shots he had readied. The employer then circled back to Vasquez, informing her it “knew” the truth and seen proof of how it was actually she who was engaging in improper conduct. She asked to see the proof, but the employer refused. The employer also refused to look at her cell phone when she offered to prove that it was really Gray who had been sending explicit texts. Apparently without engaging in any further investigation, the employer fired Vasquez for engaging in sexual harassment.

A bad internal HR investigation leads to liability for the employer.

Not surprisingly, Vasquez filed suit for retaliation under Title VII. The case went all the way to the Second Circuit Court of Appeals, the federal appeals court that covers Connecticut, New York, and Vermont. There, the question before the court was whether the employer could be liable under Title VII for retaliation, essentially because it had failed to conduct an adequate investigation. The court ruled it could.

The case involved a legal theory of liability in Title VII cases called the “cat’s paw theory.” Under this theory, an employer can be liable for discrimination, even when it did not have a discriminatory motive, if it allows a manager or other employee who does have a discriminatory motive to convince the employer to take an adverse employment action against an employee in a protected class. The court decided this theory applied because the employer had allowed Gray, an employee with a retaliatory motive, to manipulate its decision to fire Vasquez, and the manipulation had been allowed to occur because the employer did a shoddy investigation. The court held: “[A]n employee’s retaliatory intent may be imputed to an employer where . . . the employer’s own negligence gives effect to the employee’s retaliatory animus and causes the victim to suffer an adverse employment decision.”1

The court was careful to note that just “getting it wrong” in an investigation is not enough for an employer to be liable. But here, because the employer not only got it wrong, but negligently performed the investigation and allowed Gray to get Vasquez fired, it was liable for retaliation. Specifically, the court noted that the employer was negligent in its internal investigation of the employee’s complaint in several ways:

  • Crediting the alleged offender’s accusations/story to the exclusion of all other evidence;
  • Declining to examine contrary evidence tendered by the victim, when it knew, or should have known, of the co-worker’s retaliatory animus;
  • The alleged offender’s accusations formed the sole basis for the employer’s decision to terminate.

This case is a great example of how missteps in an employment investigation can cost an employer “big time.” It also demonstrates a few take-aways that can assist employers in avoiding the errors made in this case.

Don’t make the same mistakes in the investigation as this employer.

The investigation in this case provides myriad of examples of what NOT to do in an investigation. For instance, the employer made credibility determinations (and ultimately fired the reporting employee) without fact-checking or allowing the reporting employee to respond. It did not interview other employees (such as the co-worker who had been asked to lie to save the alleged offender’s job). It ignored extremely relevant evidence of the complaint by refusing to even look at the reporting employee’s cell phone. And it made a rash decision to fire the reporting employee less than 24 hours after she had first brought the issue to management’s attention. Running an investigation this way is a sure-fire way to land the company in hot water.

Consider engaging an outside investigator for important matters.

In this case, though we can only speculate why the employer was so quick to credit the co-worker and not the reporting employee, it is possible it had something to do with the personal relationships that management had developed with the employees. Bias can creep in. Hiring an independent investigator to conduct the interviews, evaluate credibility, and make findings can help an employer be responsible during an investigation. An outside firm also avoids the appearance of impropriety and bias, and may limit the possibility that decision-makers will be manipulated like they were in this case.

Consult counsel before taking an adverse employment action in response to a complaint.

The employer in this case jumped the gun by firing the reporting employee so early in the process. While it is not impossible that a reporting employee might herself be a perpetrator, or falsely malign a co-worker, taking action against the reporting party comes with a special brand of risk. Almost all federal anti-discrimination laws have provisions around retaliating against an employee for making a complaint of discrimination. It is good practice to consult legal counsel before taking an action like firing an employee after an investigation—whether that is the complaining party or the accused offender.

Acting in good faith may be a saving grace.

The law is not set up to punish employers who make good-faith mistakes after conducting internal investigations. The court in this case noted that “an employer who, non-negligently and in good faith, relies on a false and malign report of an employee who acted out of unlawful animus cannot, under this ‘cat’s paw’ theory, be held accountable for or said to have been ‘motivated’ by the employee’s animus.”2 In plain English, if the company had investigated properly and still been deceived, it would not be at fault. Moreover, even where the employer is negligent, the false accusations themselves also have to be the product of discriminatory or retaliatory intent in order for liability to attach under Title VII. If an employer proceeds in good faith with an investigation, and carefully examines all the available evidence, it is less likely to be held liable.

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1Vasquez v. Empress Ambulance Serv., Inc., No. 15-3239-cv (2d. Cir. Aug. 29, 2016).
2Id.
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