This is a guest post written by Elizabeth B. Hawkins, Esq., CCEP, Vice President & Assistant General Counsel of Targa Resources Corp.
There are many reasons that an internal investigation is required and by means in which they can become known to the company. Internal investigations should be conducted when there are allegations of minor errors in reporting or violations of company policies or procedures or allegations of misconduct in the workplace. The main goal of any internal investigation is to provide a sound, factual basis for the internal investigator to determine if there is a violation of the company’s code of conduct, relevant policies or violations of laws and make a recommendation to management as to whether an employment decision should be made. Consequently, the investigation should produce reliable documentation that can be used to support that employment decision.
This paper is not intended to address an investigation needed for a violation of state or federal law or regulations. These kinds of investigations should occur if there are allegations of misconduct that could result in criminal prosecution or civil litigation, the allegations had been publicized, or threats to report to a government agency.
I. Understanding and Assessing the Report
Step 1: General Intake – the Report received
While many employee disputes, discrimination or harassment allegations, safety concerns or other employee misconduct are directed to the Human Resources Department, many such complaints come through the company’s ethics and compliance hotline. Regardless of how they are brought to light, an assessment must be made as to whether an internal investigation is needed.
Case management begins with the initial report and a well-defined process lends credibility to each investigation. Consequently, a focus must first be on the allegations. Are they reasonable? Do they make sense? Can they be adequately evaluated to determine if an investigation is necessary? Is there enough information to move forward? The first step in any internal investigation starts with establishing the credibility of the report. And, you cannot forget that, depending on your internal metrics protocol, the clock starts ticking when that report is made. More importantly, depending on the allegations, there may be a need for immediate action to stop serious misconduct which could harm people or property.
Step 2: Interview Reporter if possible
Depending on the report, there may be a need to clarify or obtain additional facts. Are you able to make contact with the reporter? Many hotline/website reports are anonymous so getting additional facts may be difficult. Determine quickly if there is a way to make contact to request further information. If you are not able to speak directly to the reporter, develop a set of questions (who, what, when, where) that can be sent back through the website. You then wait and hope that the reporter will check back in and respond.
If you can talk with the reporter, though, there are a few ‘dos’’ and a big ‘don’t’.
Immediately try to gain the reporter’s trust
Explain that an effective investigation does require that some information will be revealed to the accused and potential witnesses
Explain that the information, though, will be shared only on a “need to know” basis
Establish a process to continue the dialogue or to follow up for additional information with the reporter – something like a callback provision; code name or am on-line two-way communication
Ask open-ended questions to obtain information: who, what, when where….and…
Ask Why? – what is motivating the reporter to report the misconduct or concern now
Ascertain the expectations of the reporter
Explain the company’s policy of prohibiting retaliation
EVER promise absolute confidentiality to any party involved in the investigation – only assure confidentiality to the extent practically allowed by the investigation.
Step 3: Is the Report credible?
The critical step in moving forward is determining whether the reported complaint is credible. Has the reporter provided adequate details to support the credibility of the alleged misconduct or concern? If you met or spoken with the reporter or know the reporter, is there a basis to believe that the report is not credible. Is there enough credible information to investigate the complaint? To what extent can documentary evidence substantiate or disprove the complaint? Are there other witnesses who could corroborate the information received from the reporter? Even if you are attempting to determine whether a reporter has a motive for reporting, always assume that the report was made in good faith. Focus on the report – not on the reporter.
I. Determining What You Have and Where the Investigation Needs to Go
Step 4: Ascertain the action that is necessary
So, you have determined that the report is credible., The next step is to quickly ascertain whether immediate action is needed to protect persons or property. If such action is needed, you may need to refer the report to another department, to executive management or, maybe even to the authorities. If that is the case, take whatever action is immediately warranted.
The report, though, may allow either you, or maybe the HR group, to assist the reporter directly with the concern and resolve the report at that time. Or, while the reporter may not be happy about something, with the facts that you have, no investigation may be needed.
Finally, upon a review of the report, you determine that an investigation may not necessarily be warranted. Such circumstances where an investigation would not be needed is if you determine that there is a misunderstanding of company policy; a management business decision with no allegation of misconduct; lack of communication between an employee and others, no violation of the company’s code of conduct or policy, o
r if the issue can be resolved informally. Take whatever steps are appropriate and close out the report. You do not want to use valuable resources if no investigation is needed.
Step 5: Determine the applicable Code Provision or Policy Violated
You have determined that with the facts, issues or allegations made by the reporter, there is enough information to investigate the alleged misconduct. Now you need to establish what actual polic(ies) or code provision(s) may be violated. In addition, is there a possible legal violation or potential litigation that should be considered. If so, the investigation should be done under privilege and decide who should be receiving the legal hold. If they are required, you are to start any communication under privilege and get the legal hold out immediately.
In addition, you need to consider whether the matter is appropriate for a normal internal investigation or a need for a different protocol. For example, are the allegations made against a high level or senior executive? Is there a concern for whistleblower retaliation? Will there be a material impact on the business or any special circumstance that would require certain sensitivities? What is the role of management in the substance of the report? An answer to any one of these questions should result in consideration of outside counsel being used to conduct the investigation.
Step 6: Ensure Confidentiality
You, as the investigator, must ensure the confidentiality of the investigation to the best of your ability. As you make contact with the individuals involved in the investigation and/or management, you must explain the need to maintain confidentiality and that all information that is gathered will remain confidential to the extent possible for a thorough investigation. Always use “CONFIDENTIAL” designations on any documentation and electronic. As to all persons, you can promise confidentiality, but not secrecy. Use gathered documents, records and information only for investigation purposes. The identity of the reporter, the subject of the report, each interviewed person and even the existence of the investigation should be kept confidential. You should also protect the confidentiality of any documents you create during the investigation. Finally, admonish the witnesses, the subject of the report and/or management that retaliation is prohibited.
Step 7: Decide who will be the Decision Maker
Depending on the complaint made, the subject matter of the allegation, the seriousness or consequences of the allegations, knowledge of the operations at issue, the resources available, the costs that could be associated with the investigation, you must identify a credible, untainted, neutral decision-maker. The decision-maker may be the head of a functional department, the head of Human Resources, the company’s General Counsel or, possibly, the President or CEO. This will be the person who will make the ultimate employment or business decision, if required.
Step 8: Identify the Investigative Leader
Ensuring investigator objectivity and independence is paramount to any good investigation. The investigator must be able to investigate objectively without bias and have the right temperament to conduct the interviews. More importantly, the investigator should have strong interpersonal skills to build a rapport with the parties involved and to be perceived as neutral and fair. The investigator should have no stake in the outcome of the investigation. The findings are to be based only on the evidence and not what the investigator believed happened. The investigator should never have a personal relationship with any of the involved parties. In addition, the outcome should not directly affect the investigator’s position within the organization.
The goal should be to learn the truth and not be the company’s morality police. The investigation can be undermined if the investigator’s action can be viewed as partial Remember, as an investigator, you are accountable to the company for every part of your investigation as your investigation might very well affect someone’s career, their reputation and their livelihood.
Finally, the investigator should be one that gives great attention to detail. The investigator should have skills that include prior investigative knowledge as well as working knowledge of employment laws. If an investigation is conducted poorly, the investigator may create legal liability for the company, hurt its reputation and could very well undermine the ‘speak up’ culture the company is striving to obtain. Quite frankly, a bad investigation is worse than no investigation at all.
II. Developing the Investigation Plan
Step 9: Establish the Scope of the Investigation
Framing the investigation allegation will assist you in conducting the proper investigation. Determine exactly what the allegations are. For example:
1) Larry Green is a company employee;
2) Larry engaged in a business transaction on the company’s behalf;
3) The business transaction was with another entity;
4) Larry or another family member has a personal interest in the other entity; and
5) Larry failed to obtain the approval of executive management before engaging in the business transaction
Framing the allegations to correlate with the particular provision of the company’s code will allow you to conduct your investigation in a meaningful and effective way. As seen above, the investigation focuses not on the question of whether there is a conflict of interest, but rather did the transaction violate the company’s code of conduct.
Remember that your plan is the key to a proper investigation. It is your roadmap of how you will conduct the investigation and ensures that you will cover all necessary points. More importantly, your plan should be tailored to the particular facts of the matter.
Step 10: Prepare the Investigative Plan
After you have determined the allegations to be investigated, you need to prepare the Investigative Plan. Prepare a brief outline setting out the overall approach to conduct the investigation. The Plan should be reflective of the two main ways to obtain evidence: gathering documents and interviewing witnesses.
Examine your strategy. Draw a ‘big p
icture’ of how you anticipate the investigation will unfold. Think through the investigative steps that should be taken and in what order. Work through what documents may be relevant to the investigation and where they are located. Identify the time frame and the key individuals that are involved. Locate the sources of the potential documentary evidence. Decide, for example, if witness interviews should wait until all documents have been collected/reviewed and in what order witnesses should be interviewed.
Step 11: Conduct the Investigation
Once the Investigative Plan is complete, get started as soon as possible.
A. Gather and Review Records (paper and digital)
Identify all the applicable documents needed. Take care not to overdo it. Focus on just the relevant documents. Conduct a comprehensive search to locate and gather the relevant documents. Allow adequate time to gather the relevant documents. Examples of documents to consider: the company’s policies; memoranda or notes regarding the reported conduct; time cards, logs, or diaries; driving records; expense reports and receipts; communications between employees; prior complaints; personnel and security files; Manager / Supervisor’s notes and files; and/or electronic documents (e.g., emails, texts, video, etc.). Social media will most certainly play a role in your investigation. It is rare to find that a person does not have a Facebook, Instagram, Twitter account or even a YouTube presence. Social media can be a gold mine of information to assist you in your investigation.
Gathering those e-documents can be challenging. You may need to review the company’s media use policy or gain special approvals to access e-documents. Depending on the scope of the investigation, you may have to utilize an outside discovery vendor to gather, analyze and maintain the electronic documentation obtained. During the process of gathering documents, identify all sources of the information obtained in the search for records.
Once records/documents are gathered, you will begin your review. You should compile or catalog all the documents received. Then identify those “hot documents.” As you begin to review these documents, you may have to revise the timeline or chronology of facts or even whether the facts have changed. Documents, at the most, can be the ‘smoking gun’ to the alleged misconduct or complaint. At the very least, the documents can assist in supporting the witness interviews.
B. Conduct Interviews and/or Obtain Statements
You must be able to influence the behavior of the witness towards responding and telling you the truth. Consequently, you should have a defined strategy to achieve this goal. The investigator should always be in control of the interview as it proceeds. Be alert as to when the witness is attempting to deceive you. Not only should you collect quality information from the witness, you must be able to solicit admissions of key points if needed.
Accordingly, establish the order of the witness interviews and prepare an Interview Outline for each witness. Determine what information you will need from each witness. Review your framed allegation(s) to keep in mind what you need to learn from that witness. Start with open-ended questions (who, where, when, what and how). Be prepared to ask follow-up questions. This is why active listening is so important during the interview. Finally, ask for supporting information and/or the basis of the witness’s knowledge.
Interviews are generally not recorded so if the witness asks if she/she can record, your answer should be ‘no.’ However, be prepared for the question and your related comfort level in saying no. They should not need a recording as you will be confirming with the witness what he or she has said through a witness statement once the interview is over.
When you begin the interview, give a standard set of instructions and explain why you are there, the investigation’s overall objective and your approach. Extend basic courtesy and create a collegial, business-like approach to the interview. Consider your appearance and demeanor and, as you are interviewing the witness, his/her demeanor. Be alert to signs of hostility. Keep an open mind and keep your opinions to yourself. While being friendly and showing empathy, stay on topic or task. Clarify dates, times, information and other witnesses’ relevancy, if needed. Always consider an interview location that should ensures privacy without interruptions. However, do not forget that you should always consider your professional and personal safety when planning and taking the interview.
When you are finished asking questions to the witness, you will need to document the witness’ interview with a written statement. Ask the witness at the time you finish the questions that you will be preparing the statement and that you will need for he or she to review and sign. It is the reason that you need to take detailed notes during the interview. Before you end the interview, make sure that you read your notes back to the witness to confirm that they are accurate. As you are transcribing the facts or information from each interview, you are doing it without speculation, opinion or subjective comments.
Anticipate a challenging witness. Be prepared for a witness that does not want to cooperate with you. Further, be prepared for a witness to question whether they need a lawyer or will not speak with you without a lawyer present. You never want to answer the question to a witness as to whether they should have a lawyer. That is their decision. But even if the witness was to retain a lawyer, you are not investigating for a criminal prosecution. So, preventing a lawyer from attending your interview should not violate any state or the federal constitution.
What if in the middle of the interview, the witness states he/she is done talking and wants to leave. Remember that most company codes require an employee to participate in a company investigation. While you cannot prevent a witness from leaving, you can discuss the fact that if he/she leaves or is not willing to assist in the investigation, it could affect the investigation, the witness’ credibility or possibly their employment status. This is particularly true when you are interviewing the subject of the report.
Finally, at the end of each interview session, do not forget to again discuss confidentiality of the investigation and the prohibition against retaliation against the reporter or any witness providing information related to the report.
III. Completing the Investigation, Finalizing the Report and the Recommendation
Step 12: Reach a Conclusion, Create Final Report and Make a Recommendation
You goal is to reach a legally defensible determination of whether improper conduct occurred. You do this by assessing the credibility of each investigation participant and the strength of that participant’s evidence. So, to do this, you must evaluate the testimony and documents. Do the statements of the witnesses match the information in the documents? Does the explanation of the witnesses or a particular witness follow the known timeline of events? Is there corroborating documentary evidence? Does the witness have actual knowledge or is it hearsay? It is important to avoid any personal interpretation of the witness’ credibility.
As you are documenting the interview, list the agreed facts and disputed facts and access the credibility of the witness as to those facts or whether there are documents that can support or dispute those facts. Make factual conclusions based on the evidence. Compare the evidence to the applicable standard (the code or policy) and determine whether the misconduct did, in fact, occur and whether the policy or code was violated.
Once you have reached a conclusion you need to create a report. Remember, your report could be in front of a jury. Good documentation is required to prepare a sound report. You should give a clear summary of the information provided by the reporter, the specific issues or alleged misconduct investigated, the reporter’s motivation/expectations for reporting, the scope of the investigations, the decision-maker, the person(s) assigned to investigate, identification of relevant documents and those ‘Hot Documents’, any electronic documents and what was obtained from social media, identify the witnesses and your notes and/or their statements. Include your observations of the reporter, the relevant witnesses and the subject of the report.
As you draft the report, stick to the facts and avoid assumptions of intent. Describe how the facts collected were analyzed and consideration was made of relevant circumstances. Use timelines or chronology of events if appropriate. Reference applicable company documents (policies, code and/or other relevant documents) and any electronic documentation retrieved. Provide a root cause analysis of any systematic weaknesses or internal control failures if applicable. Finally identify specific corrective or disciplinary actions taken to date or actions to be taken in response to the investigation. Issue the report to the Decision Maker for review and confirmation of the recommended employment action, if any. You may also be required to tailor the original report to a specific audience (executive management or the BOD). If so, summarize the result from the completed investigation with a summary of the corrective and disciplinary actions taken.
After you have completed the investigation, the report and the recommendation, you may want to close the loop with the reporter. Remember that there is a fine line as to what you can tell the reporter. You can state that the allegations were investigated, the findings were shared with appropriate management personnel and appropriate action was taken. Thank the reporter for bringing the matter to the company’s attention. What you cannot do is provide details of the investigation, identify any of the witnesses or documentary evidence obtained in the course of the investigation or the actual disciplinary action taken by management.
Unless there is a legal hold, retain and destroy the final investigation report along with the relevant documentary evidence obtained in accordance with the company’s record retention policy or guidelines. Without a legal hold, you can destroy any hand-written notes from interviews, telephone conversations, or analyses that have been incorporated into the final report. You can decide on privilege at the time of any request for these notes should litigation occur. As to the final investigative report, keep it and any relevant investigation documents in a locked confidential file drawer with controlled access on a need to know basis.