Key Employment Issues Part II:
When Trouble Arises
Susan Desmond, Principal, Jackson Lewis P.C.
Paul Griffin, General Counsel, The Select Group LLC
Melynnie Rizvi, Senior Director, Legal, Veritas Technologies LLC
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Investigating Internal Complaints
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Hypothetical Part 1
Your client is a publicly traded company with operations around the U.S. The
accounting manager, Mr. Finance, has been with the company for twenty
years, and is upset that he did not receive the CFO job. For the last couple of
months, he has been “at war” with the new CFO, Mr. Bigshot, who at one
time had been a subordinate, challenging his decisions in meetings, and
criticizing him behind his back. His work product has suffered significantly.
HR has learned through another employee that Mr. Finance has been telling
people that Mr. Bigshot has made jokes in the past calling him “a girly man”
and making off-color jokes related to sexual orientation. Mr. Finance was not
previously disciplined for his poor performance, as everyone believes he is
just upset about not becoming CFO.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Is an investigation warranted?
If so, what issues should be
investigated?
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Investigating an Employment Claim
When is investigation necessary?
• 90% of employees who file suit report internally
first.
• Early is better and sometimes promptly required.
• Restore morale/team cohesiveness.
• Prepare affirmative defenses/building the file early.
• Fiduciary/legal duty to investigate and take
remedial action.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Investigating an Employment Claim
Supervisor, HR and In-house:
• Positives:
• Know the company, the people and the work.
• HR and In-house have training and special knowledge.
• Privileged investigation?
• Negatives:
• May be involved in incident.
• May be actual or apparent conflict of interest especially
with the supervisor.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Investigating an Employment Claim
Outside counsel or consultant
• Positives:
• More experience in investigations.
• Appearance of neutrality.
• Attorney/client privileged?
• Negatives:
• Costs.
• Learning your company culture.
• Koss v. Palmer Water Department (U.S.D.C. Mass. Oct 2013)
(Not your responsibility to oversee/direct the outside
investigator)
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Do it Right…or Lose it
Evidence from In-house Investigation Precluded by court
because of:
• Bias on part of investigator.
• Not conducted by a neutral party.
• Only presenting company findings and conclusions.
• Company investigator chose witnesses.
• Complainant did not have a chance to respond.
• Focused on job performance more than complaint.
Castelluccio v IBM, 3:09CV1145(TPS) USDC D. Conn 2014
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
What is your investigation plan?
• Define scope and identify policies/laws in
question.
• Identify witnesses/sources and interview
strategy/style for each.
• Identify other sources of information.
• Identify any challenges and how to deal with
them.
• Be aware of other issues that may arise.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Hypothetical Part 2
As the investigation continues, during a department meeting, Mr.
Finance openly questions, among other things, the valuation of a large
asset purchase, stating that he believed it was against GAAP to
misstate the financials by inflating the company’s balance sheet.
HR gives Mr. Finance a written warning and verbal counseling for his
disruptive behavior at the meeting.
You ask Mr. Bigshot, the CFO, about the allegations, and he tells you
they’re ridiculous.
You learn that co-workers, including Ms. Thatcher, who was
interviewed as part of the investigation, corroborate Mr. Finance’s
claims regarding Mr. Bigshot’s comments related to sexual orientation.
Consequently, Mr. Finance and Ms. Thatcher offer to bear witness
against Mr. Bigshot.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
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What new issues do you spot here?
What are the Company’s options?
Does Mr. Bigshot have any rights or protection?
Do Mr. Finance or Ms. Thatcher have any rights or
protection?
• How does this change your investigation strategy?
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Hypothetical Part 3
Mr. Finance responds to the discipline by filing an anonymous ethics
complaint through the Company’s online reporting tool regarding his
allegations. Mr. Finance claims that Mr. Bigshot had ordered him and
other staff to cover up various financial transactions.
The investigation uncovers an email that seems to confirm Mr.
Finance’s allegations. You also discover that Mr. Finance has recorded
several conversations with Mr. Bigshot about these transactions
without Mr. Bigshot’s consent.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Investigation Format
• Have a script or investigation outline.
• Read the Company policies and relevant statutes before
beginning.
• Written acknowledgment of Upjohn warning.
• Document in writing and have interviewees confirm
accuracy of statement in writing.
• Identify key topics or information that you need from each
source to help focus the investigation.
• Always ask “is there anything else?”
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Investigation Format
Provide Upjohn Warning
• You are the attorney for the Company and work on
behalf of the Company;
• You are not their lawyer; and
• Your discussion is subject to the Company’s
attorney-client privilege, which the Company, and
not the employee, can choose to waive or disclose
to 3rd parties.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Findings and Report
• Written report with objective stance keeping
plaintiff’s counsel and the jury in mind.
• Don’t:
•
•
•
•
Use adjectives and adverbs
Write in the first person
“Evidence”
Recommendations
• Do:
•
•
State whether investigation was substantiated or
unsubstantiated, follow-up.
Be consistent and thorough.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Findings and Report
The issue isn’t the truth or falsity of the
allegation but “whether the employer
reasonably
believed
the
employee’s
allegation and acted on it in good
faith.” Jackson v. Cal-Western Packaging
Corp., 5th Cir., No. 09-20411 (Mar. 2, 2010).
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Confidentiality
• Attorney-client: Upjohn
• Company is the client but the client
can only speak through agents.
• Higher level employees preferred.
• Company policies on confidentiality
under scrutiny from NLRB in recent
years (See Banner Health System d/b/a Banner Estrella
Medical Center and James A. Navarro. Case 28–CA–023438
before the National Labor Relations Board).
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Boeing’s Confidentiality Notice
Human Resources investigations deal with sensitive information and may be
conducted under authorization of the Boeing Law Department. Because of the
sensitive nature of such information, you are directed not to discuss this case with
any Boeing employee other than company employees who are investigating this
issue or your union representative, if applicable. Doing so could impede the
investigation and/or divulge confidential information to other employees.
As a participant in the investigation, the information you provide will be treated in a
sensitive manner, however the Investigator will not promise absolute
confidentiality. Information regarding the investigation may be disclosed to
person(s) on a need to know basis.
Please contact the investigator if you have any questions in this matter. If any
coworker or manager asks to discuss the case with you, please inform him or her
that you have been instructed not to discuss it and refer the individual to the
Human Resources representative who is investigating your concern.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Overbroad Confidentiality
• The Boeing Co., case number 19-CA089374, before the National Labor
Relations Board.
•
•
Requirement that complainant employee keeps
discussion confidential violates NLRA.
“…[B]lanket
confidentiality
directives
impermissibly infringe on employees’ statutory
right to discuss among themselves their terms
and conditions of employment and otherwise
engage in concerted protected activity.”
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
NLRB Friendly Confidentiality Policy
“Verso has a compelling interest in protecting the
integrity of its investigations. In every investigation,
Verso has a strong desire to protect witnesses from
harassment, intimidation and retaliation, to keep
evidence from being destroyed, to ensure that
testimony is not fabricated, and to prevent a coverup. To assist Verso in achieving these objectives, we
must maintain the investigation and our role in it in
strict confidence. If we do not maintain such
confidentiality, we may be subject to disciplinary
action up to and including immediate termination.”
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
NLRB Friendly Confidentiality Policy
General Counsel Advice Memo amended:
“Verso may decide in some circumstances that in
order to achieve these objectives, we must maintain
the investigation and our role in it in strict confidence.
If Verso reasonably imposes such a requirement and
we do not maintain such confidentiality, we may be
subject to disciplinary action up to and including
immediate termination.” Verso Paper, Case 30-CA089350 (January 29, 2013).
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Departing Employee
Best Practices and Checklists
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Before Termination
Planning for termination decisions will help
justify a decision and defend against potential
litigation. To do so, employers should:
• Understand applicable employment laws.
• Develop and consistently apply policies.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Applicable Employment Laws
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Discrimination, retaliation, harassment?
Seeks or takes protected leave?
Reasonable accommodations?
Whistleblowing activities?
Union Activities?
Wage and hour laws?
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Terminations
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Termination Best Practices
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Time the decision to allow for privacy.
Prepare for and rehearse delivery.
Have a witness.
Be direct.
Avoid arguments.
Be prepared for a negative response.
Be empathetic.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Termination Best Practices
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•
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Disable Electronic Resource Access.
Protect Sensitive Information.
Collect Employer Property.
Escort Out of Building.
Severance/Separation Agreement?
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Severance/Separation Agreements
• Identify what benefits will be offered.
• Individual vs. group releases.
• WARN/State WARN requirements.
• Non-disparagement.
• No re-employment.
• Claims that cannot be waived/released:
– Workers’ compensation.
– Wage claims.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
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Severance/Separation Agreements (cont.)
Affirmations:
– No leave denial.
– Paid all wages.
– No other claims outstanding.
– No advice re tax designations.
– No participation in class action.
OWBPA: over 40 releases.
General release.
Any state specific requirements?
Arbitration clause?
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Managing Employment
Litigation
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Goals of Litigation Management
• Resolution of matter.
• Provide quality defense.
• Maximize the efficiency/effectiveness of legal
spend.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Look Before You Leap
• Selecting Outside Counsel
– Preferred vendors; law firms and other providers.
– Regular or case-specific RFPs.
– Negotiate rate discounts or AFAs:
•
•
•
•
Blended rates.
Flat fees.
Collars.
Risk-sharing.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Look Before You Leap
• Litigation Management/Billing Guidelines
– Define roles of counsel, insured and insurer.
• Should you have insurance?
– Establish reporting requirements.
– Create budgeting requirements.
– Alert counsel to billing requirements and
expectations.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Look Before You Leap
• Early Case Assessment:
– Assess and evaluate case.
• Don’t merely rely on outside counsel but…when you
need to you should.
– Establish settlement value (reserves / budgets).
– Develop litigation strategy.
– Evaluate ADR appetite and options.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Develop Litigation Strategy
• Business Context:
– Identify Stakeholders.
• Be mindful of their individual interests.
– Weigh Costs and Risk.
• Timing and ability to absorb.
• Can some work be done in-house or by a non-firm
vendor.
– Evaluate Disruption to Business.
– Determine the Goal of the Litigation.
• Craft strategy to fit.
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA
Thank you!
Susan Desmond, Principal, Jackson Lewis P.C.
Paul Griffin, General Counsel, The Select Group LLC
Melynnie Rizvi, Senior Director, Legal, Veritas
Technologies LLC
June 14-16, 2017 - The Loews New Orleans - New Orleans, LA