By:  S. Eric Bass, J.D., M.B.A.

Joe Fitnessbuff owns a chain of gymnasiums with many employees.  One of those employees, Brad Bodybuilder, came to Joe’s office today asking for a private conference.  Joe is busy but agrees to a short meeting because Brad looks troubled.

Brad describes to Joe how Theresa Trainer has recently been telling dirty jokes to Brad, making suggestive comments, calling his cell phone, and even touching Brad in appropriately.  Brad says he’s told Theresa to back off, but it hasn’t worked.  Brad then tells Joe that he doesn’t want Joe to do anything about Theresa.  He doesn’t want to get her in trouble.  Brad just wants Joe to know what’s been happening.

After the meeting, Joe calls Brad’s immediate manager to discuss the situation.  Brad’s manager says that he has had some complaints recently regarding Brad’s performance.  The manager tells Joe that Brad misses appointments with clients, has been rude to people, and has had poor performance lately.  The manager claims to have discussed these issues with Brad just last week and informed him that the manager was close to terminating his employment.  However, the manager has not written any of this information down for Brad’s file.

The manager also admits that the employees sometimes tell jokes that are “a little inappropriate.”  In fact, he says that he has seen Brad tell some of these jokes.  He has also noticed some “flirty banter” between Joe and Theresa, but little else.  Joe’s manager is suspicious of Brad’s motives.

Should You Investigate Alleged Misconduct?

Joe is perplexed.  He doesn’t want his employees to be harassed by anyone.  Plus, a successful claim for sexual harassment can have a severe impact on his business.  However, Joe has many questions about this situation and doesn’t know where to start.  Is Brad’s poor performance a result of Theresa’s alleged harassment?  Is Brad just using Theresa to try to keep from being terminated for his poor performance?  Should he let the issue go and do nothing?  Should he terminate either Brad or Theresa or both of them?  Should he go against Brad’s wishes and investigate the issue?  Joe didn’t sign up for this when he opened his first gym—he just wants to get on with running his business.  These situations make him very uncomfortable.  Does this scenario sound familiar?

Investigations of possible employee misconduct, whether harassment, discrimination, theft, or other misconduct, are difficult for all businesses.  Joe is required to reasonably investigate Brad’s allegation of harassment, even though Brad asked him not to pursue it.  The question is not whether to investigate, but how.

Implementing and Enforcing Policies

The first step in addressing employee misconduct is to be sure that the employer has written policies covering standards of conduct, anti-discrimination, and anti-harassment.  Such policies can help prevent misconduct and provide a method to deal with it.  The policies should provide a process for employees to report misconduct and reassurance to employees that the employer will not retaliate against someone for truthfully making a complaint.  Further, the management-level employees (at a minimum) should be trained in acceptable behavior, dealing with complaints and misconduct, and recording misconduct and disciplinary action.  Click here to learn more about developing and implementing employee handbooks.

Starting the Investigation

The employer should next investigate the facts quickly and reasonably.  Generally, investigations of serious employee misconduct, such as sexual harassment, should be handled by professionals trained in the requirements of the applicable laws.  It can be very easy for an improperly trained investigator to make the situation worse.  The investigator should also be an objective party and, ideally, not the immediate supervisor of the complaining party or the alleged bad actor.

This investigator should be given the ability to privately interview parties involved and witnesses, if needed.  During these interviews, the investigator should obtain as much detail as reasonably possible.  “Who, what, when, where, and how” questions should all be covered.  The parties should be given an opportunity to explain their side of the story with the investigator being as non-judgmental as possible. The investigator should record his or her findings so that management can understand the situation and make an appropriate decision.

Reviewing the Investigator’s Findings

Once the facts are gathered, management must review the situation and attempt to reach a proportionate and reasonable decision.  Business owners who aren’t dealing with employment law issues on a regular basis will likely need help at this point as well.  Depending on the decision and the conduct, the decision will need to be communicated in a careful manner to the parties involved. Lastly, all disciplinary actions should be carefully documented.

In Joe’s case, he has work to do.  He should contact his attorney or human resources professional to start an investigation.  If needed, he should revise his conduct policies and obtain additional training for his staff.  He should also remind his managers to properly document misconduct such as Brad’s recent behavior, whether through written notes, documentation of verbal warnings, or written warnings signed by the employee (depending on the severity of the misconduct and his company’s policies).  Hopefully, you will rarely have to deal with such issues—but chances are that you eventually will.  Make sure you are prepared and that you obtain professional advice in conducting your own investigation. To get started with this process, contact us.

S. Eric Bass is an attorney at Venn Law Group who holds both a law degree and MBA, providing him with a wealth of knowledge and insight regarding the challenges business owners face. He has more than 18 years’ experience in the areas of mergers and acquisitions, succession and exit planning, business partner agreements and issues, business formation, franchising, contract negotiations, strategic planning, and employment issues. Eric was recognized by U.S. News – Best Lawyers for 2019-2020 and The Best Lawyers in America in Employment Law – Management for 2019-2021.