Even in companies with the highest ethical standards and model workplace conduct policies, harassment, discrimination or other employee-related complaints can and do arise. When concerns are raised, companies have an obligation to conduct a full and fair investigation into the matter and take actions as warranted by the results of that internal investigation.
When an issue does arise, management’s first inclination is often to have in-house counsel or a Human Resources team member manage the internal investigation. Doing so, however, can have unintended consequences later.
One of the most significant pitfalls of using in-house staff for internal investigations is the potential for bias toward the employer. Whenever an internal team is involved in investigating and resolving workplace claims, the potential for bias is increased simply because the attorney or HR leader is employed by, and represents, the company. A responsible investigator would never intentionally take action or steer an investigation in a certain way based on bias, however the potential is present. In the event the matter ends up in litigation, good plaintiffs’ attorneys could attempt to make a case that the investigation was conducted unfairly, or that the results were unjust, due the presence of bias.
Another potential issue is that the concept of “privilege” is not necessarily clear when in-house counsel is involved in investigations. Internal investigations are generally presumed to be privileged. However, to maintain the attorney-client privilege, in-house counsel needs to make sure that communications related to the investigation are primarily designed to provide legal advice and not business advice. This can be a difficult distinction, and one that is easy to accidentally violate. The issue can become even less clear when former employees are involved in investigations, in part because the employer will have a hard time controlling communications by the former employee.
If an in-house or regular attorney prepares notes during an internal investigation, those notes may end up being discoverable and the employer can be sanctioned for failing to turn over those notes during litigation.
Using in-house counsel for internal investigations can raise questions about who the attorney/legal department is really representing, too. In-house counsel represents the employer, of course, however during internal investigations, the in-house attorney may also find him- or herself in a situation where his- or her actions have effectively given rise to potential allegations of joint representation of the employer and the employee. This can result in a conflict of interest. Even using closely-retained outside counsel for internal investigations can prove problematic for companies, because of a real or perceived conflict of interest.
Finally if in-house counsel or regular outside counsel is handling an internal investigation, they may be called to testify about the results of that investigation. This creates an issue because in most states, the rules of professional conduct prohibit attorneys from engaging in conflicts of interest, which is understood to include the possibility of the attorney being called to testify as a trial witness in litigation where the attorney represents their employer.
For all of these reasons, neither in-house counsel, an HR team nor regular outside counsel should be directly involved in investigating sensitive employment-related claims. While the company’s legal department and/or HR department should be made aware of, and kept apprised on, the investigation’s progress, actual investigation-related activities are best handled by an independent third party. In-house counsel and/or regular outside counsel can certainly serve in an advisory capacity to management and HR personnel, as appropriate.
When an internal investigation is warranted, the best course of action is to engage a firm that provides expert, confidential, professional and independent workplace investigation solutions.