nvestigations not only lose what advantages exist for having neutral third parties conduct such investigations, they risk running afoul of EEOC guidance.

When to Outsource – And Why

While most employers are mainly concerned about liability to the victim of misconduct, there is a growing trend among employees who are accused of and disciplined for misconduct to strike back and accuse their employers of violating their rights during the investigatory or disciplinary process. Conducting a fair and thorough investigation reduces the risk that an employee will be disciplined or discharged for something he or she did not do and provides a powerful defense against a claim that the company condoned unlawful conduct in the workplace.

Employers should consider using an outside investigator for four reasons:

1) Promptness. Despite the need to promptly investigate allegations of misconduct, investigations are not always management’s number one priority.

2) Expertise. Outside investigators are specialists whose expertise results in a more thorough investigation, especially where the organization involved is a small one. This expertise is particularly critical when the allegations are serious in nature and the stakes are high, such as sexual assault. In addition, outside investigators have the court

A bungled investigation can quickly turn a reasonable, still employed complainant into a hurt, damaged and angry former-employee-plaintiff. --Anonymous

For Tammie C. Allen, former admin assistant to MTSU President Sidney McPhee, the unsolicited advances, kisses, groping and requests for sexual activities from her boss were less injurious than the humiliating and biased sexual harassment investigation that followed her complaint. She expressed this outrage in a civil complaint, seeking monetary redress for incurred medical expenses and "severe emotional distress, mental anguish, indignation, wounded pride, shame and despair." Among the allegations: the investigators were under the direct supervision of the alleged offender; Ms. Allen’s attempts to provide the investigators with more witnesses to the alleged sexual harassment were ignored; Allen took a polygraph test in November to prove her case, but the TBR refused to consider that as a piece of evidence; her request for a meeting to discuss the findings of the investigation was denied; she received an involuntary transfer following the investigation that resulted in less responsibility, prestige and promotional opportunities.

Just the FACTS

The integrity of the investigatory process will be jeopardized if the investigator is perceived (rightly or wrongly) as partial or sympathetic to one view or another. In some situations, the conclusion of an internal investigation and the action it took based on the investigation will be questioned either as a whitewash or as a pretext for firing the individual without breaching his contract. This is just one of the circumstances where it pays to bring in an outsider. However, until March of this year, third-party investigations of employee misconduct were subject to the notice and consent requirements of the Fair Credit Reporting Act of 1970. At the same time, Supreme Court decisions in Ellerth and Faragher [Burlington Industries, Inc. v. Ellerth, 73 Emp. Prac. Dec. (CCH) ¶45,340 and Faragher v. City of Boca Raton, 73 Emp. Prac. Dec. (CCH) ¶45,341] made it imperative for employers to conduct investigations of harassment allegations in order to meet the second prong of the affirmative defense. Employers were in a double bind, attempting to comply with the requirements for a reasonable investigation while also complying with the FCRA requirements.

Third-party investigations of employee misconduct are no longer subject to the notice and consent requirements of the Fair Credit Reporting Act of 1970 (FCRA). On December 4, the President signed the “Fair and Accurate Credit Transactions Act of 2003,” P.L. 108-159. Section 611 of the new law amends the FCRA’s definition of “consumer report” to exclude communications made to an employer in connection with an investigation of (1) suspected misconduct relating to employment, or (2) compliance with federal, state or local laws and regulations or pre-existing written employer policies.

The 2003 FCRA amendments clarify that communications to an employer by outside third parties hired to investigate employee misconduct or compliance with the employer’s pre existing written policies will not be considered “consumer reports” and will not require advance notice or authorization. If any adverse action is taken based on the communication, however, the employer generally will be required to disclose to the employee a summary containing the nature and substance of the communication.

The Trend Toward Outsourcing

However, even before the FACT Act was signed, many employment attorneys and human resource professionals had begun advising employers to pay more attention to conducting a reasonable investigation than worrying about avoiding the FCRA requirements. There were some court decisions that pretty much dismissed the FTC opinion letter and follow-up opinions of the FTC General Counsel. Recent opinion has shifted toward using third party investigators, with or without full compliance with the FCRA, as interpreted. Part of this advice was EEOC-driven. Chairwoman Castro has repeatedly emphasized the EEOC’s position with respect to the importance of using outside investigators to conduct investigations into suspected discrimination or harassment. Specifically, Chairwoman Castro noted that the use of outside investigators is important:

1) where the employer lacks the resources to conduct investigations in-house 2) where the employer wishes to have an objective and unbiased party investigate the conduct at issue; 3) where the conduct complained of was perpetrated by very high-level employees within the company.

Although the EEOC does not generally require employers to use outside parties to conduct investigations into harassment claims, the EEOC has expressed the view that using outside investigators is important in certain circumstances, and may even be necessary where the accused harasser is a senior company official or where there is otherwise a conflict of interest. Examples of such conflicts include situations where an investigator:

* Has a personal relationship with either party. * Has witnessed any alleged material occurrence. * Has very strong feelings about either the complainant or the accused

Thus, employers who indiscriminately conduct internal investigations not only lose what advantages exist for having neutral third parties conduct such investigations, they risk running afoul of EEOC guidance.

When to Outsource – And Why

While most employers are mainly concerned about liability to the victim of misconduct, there is a growing trend among employees who are accused of and disciplined for misconduct to strike back and accuse their employers of violating their rights during the investigatory or disciplinary process. Conducting a fair and thorough investigation reduces the risk that an employee will be disciplined or discharged for something he or she did not do and provides a powerful defense against a claim that the company condoned unlawful conduct in the workplace.

Employers should consider using an outside investigator for four reasons:

1) Promptness. Despite the need to promptly investigate allegations of misconduct, investigations are not always management’s number one priority.

2) Expertise. Outside investigators are specialists whose expertise results in a more thorough investigation, especially where the organization involved is a small one. This expertise is particularly critical when the allegations are serious in nature and the stakes are high, such as sexual assault. In addition, outside investigators have the courtr

ightly or wrongly) as partial or sympathetic to one view or another. In some situations, the conclusion of an internal investigation and the action it took based on the investigation will be questioned either as a whitewash or as a pretext for firing the individual without breaching his contract. This is just one of the circumstances where it pays to bring in an outsider. However, until March of this year, third-party investigations of employee misconduct were subject to the notice and consent requirements of the Fair Credit Reporting Act of 1970. At the same time, Supreme Court decisions in Ellerth and Faragher [Burlington Industries, Inc. v. Ellerth, 73 Emp. Prac. Dec. (CCH) ¶45,340 and Faragher v. City of Boca Raton, 73 Emp. Prac. Dec. (CCH) ¶45,341] made it imperative for employers to conduct investigations of harassment allegations in order to meet the second prong of the affirmative defense. Employers were in a double bind, attempting to comply with the requirements for a reasonable investigation while also complying with the FCRA requirements.

Third-party investigations of employee misconduct are no longer subject to the notice and consent requirements of the Fair Credit Reporting Act of 1970 (FCRA). On December 4, the President signed the “Fair and Accurate Credit Transactions Act of 2003,” P.L. 108-159. Section 611 of the new law amends the FCRA’s definition of “consumer report” to exclude communications made to an employer in connection with an investigation of (1) suspected misconduct relating to employment, or (2) compliance with federal, state or local laws and regulations or pre-existing written employer policies.

The 2003 FCRA amendments clarify that communications to an employer by outside third parties hired to investigate employee misconduct or compliance with the employer’s pre existing written policies will not be considered “consumer reports” and will not require advance notice or authorization. If any adverse action is taken based on the communication, however, the employer generally will be required to disclose to the employee a summary containing the nature and substance of the communication.

The Trend Toward Outsourcing

However, even before the FACT Act was signed, many employment attorneys and human resource professionals had begun advising employers to pay more attention to conducting a reasonable investigation than worrying about avoiding the FCRA requirements. There were some court decisions that pretty much dismissed the FTC opinion letter and follow-up opinions of the FTC General Counsel. Recent opinion has shifted toward using third party investigators, with or without full compliance with the FCRA, as interpreted. Part of this advice was EEOC-driven. Chairwoman Castro has repeatedly emphasized the EEOC’s position with respect to the importance of using outside investigators to conduct investigations into suspected discrimination or harassment. Specifically, Chairwoman Castro noted that the use of outside investigators is important:

1) where the employer lacks the resources to conduct investigations in-house 2) where the employer wishes to have an objective and unbiased party investigate the conduct at issue; 3) where the conduct complained of was perpetrated by very high-level employees within the company.

Although the EEOC does not generally require employers to use outside parties to conduct investigations into harassment claims, the EEOC has expressed the view that using outside investigators is important in certain circumstances, and may even be necessary where the accused harasser is a senior company official or where there is otherwise a conflict of interest. Examples of such conflicts include situations where an investigator:

* Has a personal relationship with either party. * Has witnessed any alleged material occurrence. * Has very strong feelings about either the complainant or the accused

Thus, employers who indiscriminately conduct internal investigations not only lose what advantages exist for having neutral third parties conduct such investigations, they risk running afoul of EEOC guidance.

When to Outsource – And Why

While most employers are mainly concerned about liability to the victim of misconduct, there is a growing trend among employees who are accused of and disciplined for misconduct to strike back and accuse their employers of violating their rights during the investigatory or disciplinary process. Conducting a fair and thorough investigation reduces the risk that an employee will be disciplined or discharged for something he or she did not do and provides a powerful defense against a claim that the company condoned unlawful conduct in the workplace.

Employers should consider using an outside investigator for four reasons:

1) Promptness. Despite the need to promptly investigate allegations of misconduct, investigations are not always management’s number one priority.

2) Expertise. Outside investigators are specialists whose expertise results in a more thorough investigation, especially where the organization involved is a small one. This expertise is particularly critical when the allegations are serious in nature and the stakes are high, such as sexual assault. In addition, outside investigators have the court

08-159. Section 611 of the new law amends the FCRA’s definition of “consumer report” to exclude communications made to an employer in connection with an investigation of (1) suspected misconduct relating to employment, or (2) compliance with federal, state or local laws and regulations or pre-existing written employer policies.

The 2003 FCRA amendments clarify that communications to an employer by outside third parties hired to investigate employee misconduct or compliance with the employer’s pre existing written policies will not be considered “consumer reports” and will not require advance notice or authorization. If any adverse action is taken based on the communication, however, the employer generally will be required to disclose to the employee a summary containing the nature and substance of the communication.

The Trend Toward Outsourcing

However, even before the FACT Act was signed, many employment attorneys and human resource professionals had begun advising employers to pay more attention to conducting a reasonable investigation than worrying about avoiding the FCRA requirements. There were some court decisions that pretty much dismissed the FTC opinion letter and follow-up opinions of the FTC General Counsel. Recent opinion has shifted toward using third party investigators, with or without full compliance with the FCRA, as interpreted. Part of this advice was EEOC-driven. Chairwoman Castro has repeatedly emphasized the EEOC’s position with respect to the importance of using outside investigators to conduct investigations into suspected discrimination or harassment. Specifically, Chairwoman Castro noted that the use of outside investigators is important:

1) where the employer lacks the resources to conduct investigations in-house 2) where the employer wishes to have an objective and unbiased party investigate the conduct at issue; 3) where the conduct complained of was perpetrated by very high-level employees within the company.

Although the EEOC does not generally require employers to use outside parties to conduct investigations into harassment claims, the EEOC has expressed the view that using outside investigators is important in certain circumstances, and may even be necessary where the accused harasser is a senior company official or where there is otherwise a conflict of interest. Examples of such conflicts include situations where an investigator:

* Has a personal relationship with either party. * Has witnessed any alleged material occurrence. * Has very strong feelings about either the complainant or the accused

Thus, employers who indiscriminately conduct internal investigations not only lose what advantages exist for having neutral third parties conduct such investigations, they risk running afoul of EEOC guidance.

When to Outsource – And Why

While most employers are mainly concerned about liability to the victim of misconduct, there is a growing trend among employees who are accused of and disciplined for misconduct to strike back and accuse their employers of violating their rights during the investigatory or disciplinary process. Conducting a fair and thorough investigation reduces the risk that an employee will be disciplined or discharged for something he or she did not do and provides a powerful defense against a claim that the company condoned unlawful conduct in the workplace.

Employers should consider using an outside investigator for four reasons:

1) Promptness. Despite the need to promptly investigate allegations of misconduct, investigations are not always management’s number one priority.

2) Expertise. Outside investigators are specialists whose expertise results in a more thorough investigation, especially where the organization involved is a small one. This expertise is particularly critical when the allegations are serious in nature and the stakes are high, such as sexual assault. In addition, outside investigators have the court

full compliance with the FCRA, as interpreted. Part of this advice was EEOC-driven. Chairwoman Castro has repeatedly emphasized the EEOC’s position with respect to the importance of using outside investigators to conduct investigations into suspected discrimination or harassment. Specifically, Chairwoman Castro noted that the use of outside investigators is important:

1) where the employer lacks the resources to conduct investigations in-house 2) where the employer wishes to have an objective and unbiased party investigate the conduct at issue; 3) where the conduct complained of was perpetrated by very high-level employees within the company.

Although the EEOC does not generally require employers to use outside parties to conduct investigations into harassment claims, the EEOC has expressed the view that using outside investigators is important in certain circumstances, and may even be necessary where the accused harasser is a senior company official or where there is otherwise a conflict of interest. Examples of such conflicts include situations where an investigator:

* Has a personal relationship with either party. * Has witnessed any alleged material occurrence. * Has very strong feelings about either the complainant or the accused

Thus, employers who indiscriminately conduct internal investigations not only lose what advantages exist for having neutral third parties conduct such investigations, they risk running afoul of EEOC guidance.

When to Outsource – And Why

While most employers are mainly concerned about liability to the victim of misconduct, there is a growing trend among employees who are accused of and disciplined for misconduct to strike back and accuse their employers of violating their rights during the investigatory or disciplinary process. Conducting a fair and thorough investigation reduces the risk that an employee will be disciplined or discharged for something he or she did not do and provides a powerful defense against a claim that the company condoned unlawful conduct in the workplace.

Employers should consider using an outside investigator for four reasons:

1) Promptness. Despite the need to promptly investigate allegations of misconduct, investigations are not always management’s number one priority.

2) Expertise. Outside investigators are specialists whose expertise results in a more thorough investigation, especially where the organization involved is a small one. This expertise is particularly critical when the allegations are serious in nature and the stakes are high, such as sexual assault. In addition, outside investigators have the court

nvestigations not only lose what advantages exist for having neutral third parties conduct such investigations, they risk running afoul of EEOC guidance.

When to Outsource – And Why

While most employers are mainly concerned about liability to the victim of misconduct, there is a growing trend among employees who are accused of and disciplined for misconduct to strike back and accuse their employers of violating their rights during the investigatory or disciplinary process. Conducting a fair and thorough investigation reduces the risk that an employee will be disciplined or discharged for something he or she did not do and provides a powerful defense against a claim that the company condoned unlawful conduct in the workplace.

Employers should consider using an outside investigator for four reasons:

1) Promptness. Despite the need to promptly investigate allegations of misconduct, investigations are not always management’s number one priority.

2) Expertise. Outside investigators are specialists whose expertise results in a more thorough investigation, especially where the organization involved is a small one. This expertise is particularly critical when the allegations are serious in nature and the stakes are high, such as sexual assault. In addition, outside investigators have the courtroom experience that will make them a powerful witness should the complaint eventually go to trial.

3) Impartiality. Although the employer hires the investigator, Morgan believes there still is the sense that the investigation is not an “inside” job. Based on my experience conducting investigations, I believe people are more open and more willingly share more information with an outsider, especially when the allegations are against a high-ranking individual in the organization. The objectivity of an internal investigation in that scenario is more easily quest

4) Confidentiality. There is a strong need for confidentiality for the persons who are asked to report what has happened. They are often concerned about retribution, so the ability to offer a considerable blanket of protection is helpful. When I am hired to conduct an investigation, I want to know to what degree the comments I gather will be held in confidence by management.

The Bottom Line Increasingly, the scales are tipped in favor or employers who use outside investigators to investigate misconduct allegations, particularly when they involve a potential conflict of interest, possible litigation, or high-ranking individuals.

Checklist: Advantages of Using An Outside Investigator Now that employers are relieved of some of the notice and disclosure requirements of the Fair Credit Reporting Act when investigating allegations of misconduct, they may want to consider some of the following advantages to bringing in an outside investigator.

- Knowing that he or she will not have to “live” with either the accused or the accuser after the investigation may help the investigator remain impartial.

- The outside investigator has no previous experience with any of the parties involved and so comes to the investigation without the kinds of prejudices that arise from knowing someone’s past performance or history.

- Witnesses may be more forthcoming with an outsider, not having to fear that what they tell the person may someday become “conversation around the water cooler.”

- Using someone from an outside investigation firm may benefit the investigation as he or she could be familiar with the type of investigation needed and have questions to ask or tools to use that might not have been thought of internally.

- The outside investigator will be brought in specifically for the purpose of carrying out the investigation and will not require that someone from the organization find time in his or her schedule to do the work.

Copyright 2006 Joni Johnston