Minnesota Labor & Employment Law Blog : Minnesota Employment Lawyers & Attorneys : Abrams & Schmidt Law Firm : Unfair Labor Practices, Workplace Investigations : Minneapolis, St. Paul, Twin Cities

Based on my experience with over 1,000 workplace investigations of employee misconduct, formerly representing employees and now exclusively representing employers, it was pretty easy to develop a list of the top 10 worst investigation mistakes. Here is Part 2 outlining what investigative mistakes can either qualify as a snafu, (a situation marked by errors or confusion) or an outright fubar, (fouled up beyond all recognition).

6.  Microscope and Telescope.  We all know a microscope magnifies very small things, and a telescope can bring far away stars and planets and make them look very close.  Each workplace investigation should carefully scrutinize the facts of the alleged employee misconduct and then step back and consider the actions in light of the entire workplace.  Insuring all employees are treated alike and all actions of misconduct are handled in a similar manner can only occur if you use both a microscope and a telescope in viewing a workplace investigation.

7.  “I don’t know” or “I don’t recall” does not necessarily mean “I am lying.”  Employees understandably can be nervous while giving an investigative interview.  A few “I don’t remembers” are to be expected and even a few “I can’t recalls” can be expected.  These answers should not automatically be interpreted as the employee is lying.  Dishonesty should be assessed through both witness credibility techniques and empirical evidence. 

8.  Don’t assume facts.  Facts must be established through statements, witnesses, and evidence.  They should never be assumed.  Making assumptions instead of relying on established facts, will result in a weak investigation which will be very difficult to defend.

9.  Failing to listen means failure for the investigation.  An investigator must be flexible and focus on listening to the responses of witnesses, so they can then probe more deeply.  Too often, the investigator will focus more on checking off a list of sequential questions when interviewing a witness, than asking crucial follow-up questions.  This is a fatal flaw.  A thorough investigation is the goal, not merely checking off a completed task. 

10.  Wrap it up right.  The conclusion of a workplace investigation should have a well thought out format which addresses the process of the investigation, the findings, supportive facts, and conclusions. It should be wrapped up and presented to the decision-maker like a Christmas present for careful consideration.

Workplace investigations are not for the faint of heart or the weak in spirit.  They can affect workplace productivity and morale. They should be undertaken with careful planning and execution to insure fairness and even-handedness.  If employee discipline results from the investigation, it must be defensible.  There are no easy short-cuts to a quality investigation.

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As the City of Detroit is learning, discrimination claims under the Americans with Disabilities Act may not result from your typical disabilities. Susan McBride, a city employee, filed a lawsuit under the Americans with Disabilities Act in 2007, claiming the City violated her rights under the ADA by failing to accommodate her chemical sensitivity. Ms. McBride claimed a life-long chemical sensitivity to scented substances such as perfume, body lotion, aftershave, cologne, hand cream, hair spray, deodorant, and various cleaning compounds. Exposure to these and other irritants caused headaches, nausea, chest tightness, cough, and rhinitis and required her to seek medical care. When a coworker refused to quit wearing perfume Ms. McBride complained to her supervisor and requested the City implement and enforce a “no-scent policy” as an accommodation to her chemical sensitivity. The City denied her request and offered no alternative accommodation.

A disability determination under the ADA (now updated and revised as the ADAAA) is to be made on a case-by-case basis. The City of Detroit filed a motion to dismiss Ms. McBride’s case in 2007, but the motion was denied. (pdf) Recently, the City of Detroit settled out of court with Ms. McBride for $100,000. It will also be putting up signs warning workers to avoid wearing scented products. Because the case was settled, it is not possible to say if her chemical sensitivity would be considered a disability under the ADA or ADAAA.

What do employers need to take away from this case? A few things spring to mind:

(1) Take employee complaints seriously.
(2) Address issues promptly to avoid unnecessary costs later.
(3) Consider if a policy might fix a problem.

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Based on my experience with over 1,000 workplace investigations of employee misconduct, formerly representing employees and now exclusively representing employers, it was pretty easy to develop a list of the top 10 worst investigation mistakes. The investigative mistakes can either qualify as a snafu, which is a situation marked by errors or confusion or an outright fubar. A fubar for those of you unfamiliar with World War II soldier slang, stands for “fouled up beyond all recognition,” or a derivative of fouled up.

1. Personalizing the investigation. An Investigator too often personalizes the investigation instead of sticking with fact and evidence collection. The Investigator’s role is to serve as a neutral fact-finder. The Investigator should be discrete, respectful, and professional.

2. Misunderstanding voluntary and compelled witness statements. Failure to understand the difference between a voluntary witness statement and a compelled statement can be lethal! If an employer wants to take a compelled statement from an employee as part of a workplace investigation, it may impact on whether or not the conduct could ever be pursued criminally. The 1967 United States Supreme Court decision in Garrity v. New Jersey (pdf) addresses this issue. It is crucial to first determine whether or not the allegation of employee misconduct concerns criminal conduct. If it does, have prosecuting authorities review the matter first before conducting a workplace investigation.

3. Failure to consider all management options. Management has a full cadre of available options to consider in managing employees. These include training, coaching/counseling, policy revision, notation in a supervisory file, performance evaluation, or mentoring to name a few. Only after carefully considering all available options and alternatives, should a workplace employment investigation be initiated.

4. Failure to develop an investigative plan. If a workplace investigation is warranted, careful thought should go into deciding: a) the list and order of witnesses, b) timing of the investigation, c) how witness statements will be memorialized, d) what evidence needs to be collected, e) who might be present during interviews and f) what rights the suspect employee might have to representation, if any.

5. Failure to follow up on all leads. It is very difficult to defend an incomplete investigation. All leads must be pursued to a rational conclusion and all witnesses must be interviewed, or an intentional decision made that the witness can’t offer any substantive information. All i’s must be dotted and all t’s must be crossed. The scope and procedure of the investigation may be scrutinized by an arbitrator or a judge. It is best to think ahead and consider the possible review which may follow the conclusion of an investigation.
 

Investigations should be conducted intentionally with a very definite plan. Stay tuned for Part 2.

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Maybe you have heard of this concept or maybe not, it is a new trend in workplaces called ROWE, which stands for Results-Only-Work-Environment. ROWE is a management strategy where employees are evaluated on their performance and productivity, and not their time or presence in the workplace. ROWE allows employees to work from home or during less conventional hours, as long as productivity goals are met. ROWE was co-founded by Cali Ressler and Jody Thompson.  According to the ROWE founders, the strategy can help a business:

• Increase productivity and efficiency
• Attract and retain talented employees
• Optimize work space
• Eliminate wasteful work processes
• Increase teamwork and morale among employees

In Minnesota, Hennepin County currently has 500 employees who participate in ROWE and an additional 1,500 county workers are being trained in ROWE. Full-time Hennepin County employees are still required to maintain a 40 hour work week.

In this time of economic uncertainty, perhaps ROWE can benefit your workplace and save you money, while increasing productivity and job satisfaction.

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Bill Salisbury of the St. Paul Pioneer Press reported cases of fraud, theft, and embezzlement by public employees has risen in the last three years. According to Minnesota State Auditor, Rebecca Otto, the increase is in part due to the tough economic climate, staff reductions and fewer people exercising internal controls, as well good old human temptation.  People are also more likely to rationalize  doing something they normally would not do.

Otto stated, "People can see weaknesses in control systems, and may be more tempted to exploit them. They are  more likely to think that nobody will notice." My law partner, Tiffany Schmidt, recently blogged on the importance of conducting an investigation in the event an employer suspects fraud or theft. Without a thorough investigation it is extremely difficult to substantiate disciplinary decisions.

A business audit and some simple changes in business practices can go a long way to avoid employee temptation, or at least make it easier to uncover fraud and theft. Employers should first conduct a vulnerability assessment on their business practices and then consider:

• Developing an anonymous reporting system which encourages employees to come forward and report fraud and theft.
• Developing a business ethics policy and include it in your employee handbook.
• Changing internal practices for money handling to insure one person does not have sole responsibility for handling finances.
• Conducting background checks on prospective employees.
• Working with your business banker and adding controls for cash, checks, and supplies.
• Changing inventory tracking practices.
• Maintaining good records on company equipment/inventory to prevent loss or misplacement.
• Reviewing phone, credit card, and postage expenditures.
• Spot checking workplace garbage cans and outside trash containers to prevent “ditching” things and recovering them after work hours.
• Changing the locks and limiting access to workplace premises.
• Password protecting sensitive business records on computers. 

Good business practices can be very effective in removing opportunity and temptation, preventing employee fraud and theft in your workplace.

 

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The debacle of Toyota continues to play out in the media. Today, the embattled car manufacturer once touted as the most successful in the world, is the subject of U.S. government safety investigations and numerous court cases. Toyota owners are suing over the loss of value of their vehicles and families are suing over the tragic loss of at last count 34 lives, involved in crashes attributed to unexplained acceleration problems. You don’t need a crystal ball to predict Toyota stands to lose billions of dollars, or that the global impact on the manufacturer will continue for years to come.

How could this have happened to the car manufacturer? Didn’t they develop their own “lean” manufacturing and production process which has been adopted by other corporate giants trying to emulate Toyota’s success? Didn’t Toyota have a book written about their corporate climb to success called The Toyota Way, which details the 14 management principles that drove them to the top of the heap of automobile manufacturers? 

Despite developing corporate principles covering philosophy, people, process, and problems, Toyota fostered a culture that prevented reporting of the acceleration malfunctions. Toyota’s fall from grace can’t be attributed to just one thing. Instead it should be viewed as a series of events including:

• poor supplier control,
• lack of leadership,
• employing too many “yes” people,
• failing to see an automobile as the sum of its parts,
• human resources problems,
• procrastination, etc.

Intervention at a variety of individual points in the chain of events could have prevented this corporate train wreck. Unfortunately, in the words of an old Japanese saying, “The nail that stands out was not encouraged to be different, but instead it was pounded down to conform.”

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Minnesota law provides, employees on an unpaid suspension for 30 calendar days or less, as a result of employment misconduct are not entitled to receive unemployment benefits.

However, in a recent unpublished Court of Appeals decision (pdf), the Minnesota Department of Employment and Economic Development conceded, if an employee who was placed on an unpaid suspension during an employment investigation was later exonerated or the conduct did not amount to misconduct, the employee would not be disqualified from receiving unemployment benefits during the unpaid suspension.

Minnesota employers should keep this in mind when deciding whether or not to place an employee on a paid or unpaid suspension pending an employment investigation. A wrong decision could increase your unemployment insurance rating and cost your business more money.

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Rule-making by a federal agency provides a great opportunity to anticipate the direction and focus of the agency. The Equal Employment Opportunity Commission (EEOC) is offering us just such a window, with a proposed new rule construing the “reasonable factors other than age” defense used by many employers.  The EEOC will be accepting comments until April 19, 2010, prior to adopting the proposed new rules

The new rule is the agency’s response to two U.S. Supreme Court decisions.  Brian Hall of the Employer Law Report blog provides a great overview of both cases, and summarizes the impact as, “Employers will be required to show that the challenged practice was reasonably designed to further or achieve a legitimate business purpose and was reasonably administered to achieve that purpose.“

The proposed new EEOC rules provide for a “prudent employer” standard to assess whether or not an employer relied on reasonable factors in making an employment decision, and includes this list of examples which are not exhaustive:

(i) Whether the employment practice and the manner of its implementation are common business practices;

(ii) The extent to which the factor is related to the employer's stated business goal;

(iii) The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);

(iv) The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;

(v) The severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and

(vi) Whether other options were available and the reasons the employer selected the option it did.

The proposed rules offer a glimpse into the future of the EEOC. It would not hurt to begin to follow these suggestions in making business decisions which may have a disparate impact on older workers now, especially in RIF or lay-off situations. The EEOC window looks pretty clear. 
 

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Daniel Schwartz from the Connecticut Employment Law blog, reported this morning President Obama signed a bill yesterday extending the COBRA subsidy. The bill which provides a temporary extension of certain programs specifically extends the COBRA subsidy, which had expired on Sunday, February 28, 2010, to March 31, 2010. The bill is retroactive to February 28, 2010.

How does this affect employers? If you terminated any employees on Monday, March 1 and Tuesday, March 2, those employees now fall under the COBRA subsidy and you will need to revisit the information you provided to the former employees and issue an updated COBRA notice.

Because the government keeps extending the subsidy, it is important to speak with your legal counsel about any COBRA-related questions before terminating employees, so you have the most up-to-date information.

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