Internal Investigation Case Law Update (March 2016)
Buckner provides a summary of recent opinions, decisions and orders from federal courts regarding internal investigations, as well as key takeaways from each, to assist you with planning and conducting internal investigations:
Hawa v. Coatesville Area School District, No. 15-4828 (E.D. Pa. Feb. 26, 2016):
SUMMARY: One of the plaintiffs, the school district’s director of technology, alleged, among other claims: (1) the school district’s then superintendent and director of athletics, who were co-defendants, retaliated against him for exercising his First Amendment right to speak about the employees' racist emails; and (2) the defendant school district’s “conduct in connection therewith” violated 42 U.S.C. § 1981, “which ensures equal protection in the making and performance of contracts”. [Note: “Claims for violation of Section 1981 can only be brought by way of an action under 42 U.S.C. § 1983.”] In granting the defendants’ motion to dismiss, the United States District Court for the Eastern District of Pennsylvania determined: “To plead a prima facie case for a First Amendment retaliation claim under Section 1983, a plaintiff must allege that: (1) he or she engaged in speech protected by the First Amendment; (2) the government responded with retaliatory action that would cause a person of ordinary firmness not to exercise his or her First Amendment right; and (3) there is a causal link between the retaliation and the protected speech. Nevertheless, to be actionable the retaliatory conduct must be more than de minimis.” The district court noted "an internal investigation, without subsequent demotions, terminations, reductions in pay, transfers, or other similar adverse impacts on an employment situation, [is] not sufficient to sustain a First Amendment retaliation claim." 
INTERNAL INVESTIGATION TAKEAWAY: In order to minimize an organization’s liability involving an employee’s First Amendment retaliation claims under Sections 1981 and 1983, conduct an objective and thorough internal investigation, and only develop and implement adverse employment actions that are consistent with: (1) the findings of the internal investigation; and (2) the organization’s policies, procedures and protocols, especially the disciplinary matrix.
Williams v. United States Environmental Services, LLC, No. 3:2015cv00168 (M.D. La. Feb. 16, 2016):
SUMMARY: The plaintiff employee alleged the defendant employer violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, by subjecting her to discriminatory compensation; sexually harassing conduct by her supervisor; and retaliation by firing her shortly after reporting her supervisor's conduct. In considering the plaintiff's motion to compel responses to a request for production, the United States Court for the Middle District of Louisiana reviewed the plaintiff’s argument the defendant wrongfully withheld communications pertaining to its internal investigation of the plaintiff’s discrimination claims “based on unfounded claims of privilege”. The defendant contended the investigative documents constituted attorney work product and were covered under the settlement privilege. The district court explained (internal citations omitted): “Work product protection extends to documents and tangible things that are prepared in anticipation of litigation by a party or its representative, Fed. R. Civ. P. 26(b)(3)(A), but does not extend to the underlying relevant facts, or to documents assembled in the ordinary course of business. The burden of establishing applicability of the work product doctrine falls on the party withholding discovery.” The district court noted “documents do not constitute work product [if] they are part of a human resources investigation and were created in the ordinary course of business”, and ruled the defendant’s human resource’s “internal investigation and the documents created in connection with it were a result of Defendant's routine business practice of investigating internal complaints of discrimination and would have occurred regardless of any threat of litigation”. Further, the district court determined even if it “were to find the work product doctrine applied, the communications would still be discoverable as Defendant has put them at issue in this litigation and effectively waived any applicable privilege” since the defendant relied on the human resources’ “internal investigation to defend against both Plaintiff's claims of sexual harassment and of retaliation”. [Note: “In response to Plaintiff's sexual harassment claim, Defendant has raised the Faragher/Ellerth affirmative defense articulated by the Supreme Court. The defense requires an employer to show that: (1) it exercised reasonable care to prevent and promptly correct any sexually harassing behavior; and (2) the employee failed to take advantage of any preventive and corrective opportunities made available.” See also Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 765 (1998); Faragher v. City of Boca Raton, 524 U.S. 775, 807 (1998).] The district court held the communications relating to the human resource-led internal investigation were not protected by the work product doctrine and settlement privilege.
INTERNAL INVESTIGATION TAKEAWAY: An organization should be prepared to produce its internal investigation reports, files and related communications in subsequent litigation if the inquiry was conducted “in the ordinary course of business”. However, since the work product doctrine generally extends to documents and tangible things that are prepared in anticipation of litigation by a party or its representative, an organization should develop a protocol or revise its internal investigation policy to determine when investigations should be outsourced to outside counsel to establish a word product protection.
Contact Buckner attorney Michael Buckner (+1-954-941-1844 ext. 1; for more information on internal investigation issues.