‘Let the Process Work’

Lisa Cassilly, an employment attorney at Alston & Bird, remembers a case in which a publicly traded company bumbled an internal investigation triggered by a whistleblower. As soon as one of the corporation’s executives heard about the allegations of financial irregularities, he did everything he could to stand in the way, including limiting the scope of the inquiry, the witnesses to be interviewed, and the documents to be reviewed. The investigation concluded with insufficient evidence.

A year later, the same issues surfaced again, but this time the company hired outside legal counsel. The result: Criticisms were substantiated and the company corrected the problems. 

“The point of the story is that, because of the impeding of a proper investigation in the first instance, they were a year late in [correcting matters], with potential exposure to the company as a consequence,” says Cassilly. “The investigation needs integrity, and it’s sometimes necessary to protect against interference by representatives of the company, including highly placed executives—especially if they have special interest in the outcome.”

Internal investigations generally stem from complaints of misconduct or noncompliance and may be prompted through an anonymous employee hotline, a verbal complaint to the boss, or getting in touch with an agency such as the SEC, OSHA or EEOC. Depending on the nature of the complaint, the process is handled in-house by the human resources department or corporate counsel, or by an outside or independent lawyer and other experts who assess, for example, environmental disasters or product liability claims. 

An outside investigator can objectively gather the facts, says Richard Gerakitis, an employment attorney at Troutman Sanders. “Otherwise you literally are left with an inconclusive investigation that is nothing more than ‘he said, she said.’”

Every company should establish a plan for internal investigations long before there’s a need for one, adds Margaret Campbell, an employment attorney at Ogletree Deakins. “The more that a company does to define ahead of time what’s supposed to happen and who’s supposed to do it, the better off the company is,” she says.

Nevertheless, some business executives panic in the face of a looming investigation and make matters worse. It goes beyond stonewalling. “A lot of times, folks take a legal pad and say, ‘Let’s go talk to the accuser,’” Gerakitis says. “I see businesses where there’s an anonymous complaint made and the first thing they try and do is to figure out who the whistleblower is.”

While such haste can backfire, it is important to work quickly once a complaint is made. Employees may lose faith if they see feet-dragging or failure to enforce company policies. 

“Some investigations can be concluded in 48 hours. Others can take a month or more,” says Cassilly. “It’s in the best interest of the company to avoid any kind of unnecessary delay.”

Employees, too, are expected to cooperate, respect confidentiality requests, and refrain from retaliating in any way against an accuser. In a harassment claim, supervisors should strongly consider separating the complainant from the coworker they’ve accused. “You wouldn’t want a monthlong investigation taking place at the same time the complaining individual is still working daily with the person she’s accusing,” Cassilly says.

As the investigation proceeds, says Campbell, “The company needs to adopt an attitude of what I call institutional patience. Let the process work and then follow wherever the investigation leads. If there’s a finding that there’s no problem, then everybody goes on and does their jobs the way they’re supposed to. If there’s a problem, then fix it and take whatever action is appropriate.”

Closure is crucial. Notify the proper personnel, including the complainant and the accused, that the investigation is over and keep a detailed report. “It’s vitally important,” Gerakitis says, “to make sure folks who were involved in the investigation have at least some explanation of the outcome.”