Employer Internal Investigations – Are They Confidential? 

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Employer Internal Investigations – Are They Confidential?

Many employers get a complaint about an employee or some wrongful conduct and immediately launch into an investigation.  Even more, when investigating, the employer often confirms to other employees that what the employee or witness says will be kept confidential.  But, will it?

When conducting an internal investigation, deciding at the outset whether it needs to be confidential and then taking steps to limit the likelihood of disclosure is important.  Each incident and investigation will be unique, but generally, preparing before launching into it is the most important step.  The facts of the recent case of General Motors, LLC v. Ashton is illustrativeWhen the other side demanded disclosure of the investigation details, the court denied the request by the defendant, former United Auto Worker’s Vice President Joseph Ashton, for General Motors’ for documents and communications related to internal investigations led by its consulting expert investigators. Why?  An employee did not do the investigation.  The investigators were outside consultants hired by GM’s attorneys.  Ashton even demanded to know the identity of the investigators.  GM said not so fast and asserted attorney work product privilege because the investigators worked at the direction of the GM attorneys.

GM’s success in maintaining the confidentiality of its internal investigation was primarily due to its decision, made very early on, to use the investigators as non-testifying consulting experts only and working for GM’s attorneys. This decision ultimately shielded the investigators, the process and the investigation work product from disclosure as it was deemed attorney work product materials prepared in anticipation of litigation.

Also critical is that the investigators learned the facts/details solely from their investigation by GM engaging and retaining outside counsel, who then engaged the investigators to conduct the internal investigations at the direction of that counsel.  The investigators’ work product was not put at issue in the ensuing litigation, by deciding not to use the testimony of the investigators as evidence against Ashton.  Rather, GM decided that while it would allege the facts against Ashton that the investigators uncovered, it would only prove those facts through other evidence obtained during discovery.

GM’s plan here provides a great example of how a company can prevent the disclosure documents and communications related to internal investigations. By the way, Ashton was fired and was convicted of conspiring with other union officials to engage in honest services wire fraud by taking $250,000 in bribes and kickbacks from a union vendor and for conspiring to launder the proceeds of the scheme.  He is serving 30 months in prison.

While criminal activity is one type of event causing an employer to launch an investigation, there is myriad of other causes, ranging from harassment, to conflict of interest, to outright theft allegations.  Here at Epps & Coulson, LLP we regularly help employers investigate internal activities and decide what to do.  Please feel free to contact Dawn at: dcoulson@eppscoulson.com for any questions.

Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.  It is likely considered advertising.  Epps & Coulson, LLP encourages you to call to discuss these matters as they apply to you or your business.

Attorneys admitted to practice in California, New York, Colorado, Texas, and Oregon