Workplace investigations are generally conducted outside of a litigation context and involve complaints that are not ultimately litigated. However, inevitably some workplace disputes that are investigated do make it to litigation. Workplace investigations are then often viewed as tools employers use to shield themselves from liability in litigation. But a thorough, impartial workplace investigation can serve as a powerful asset for both employer and employee in employment litigation. Courts across the country have held that a credible workplace investigation (or lack thereof) can play an important role in providing evidence of a defendant-employer’s liability and the plaintiff-employee’s credibility. Not only can a well-executed investigation strengthen the legal position of both parties, but it can also contribute to fairer, more efficient alternative dispute resolutions, such as mediation and arbitration.
Legal Requirement to Investigate
Under state and federal law, employers are required to take all reasonable steps necessary to prevent discrimination, harassment, and retaliation from occurring. See, e.g., 42 U.S.C. § 2000e et seq., Cal. Gov’t Code § 12940(k). This includes conducting a prompt, thorough and impartial investigation when an employer knew or should have known about a violation of Equal Employment Opportunity laws or policies. See, e.g., EEOC Enforcement Guidance on Harassment in the Workplace (April 29, 2024); 2 Cal. Code Regs. § 11023(b).
For Defendants: Investigations as a Legal Safeguard
A properly conducted investigation can offer substantial legal and strategic advantages for defendant-employers in litigation. Most importantly, a thorough investigation can demonstrate a responsible, good-faith response to employee concerns.
Practically, one of the most powerful legal incentives for employers to conduct timely and fair investigations is the Faragher-Ellerth defense. In Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), the U.S. Supreme Court established an affirmative defense for employers in certain Title VII harassment cases. An employer may avoid liability under federal law, even if harassment occurred, If the employer can show that:
- It exercised reasonable care to prevent and promptly correct any harassing behavior, and
- The employee unreasonably failed to take advantage of any preventive or corrective opportunities.
Under California law, this evidence does not act as a defense to liability, but it can reduce damages. See State Dept. of Health Services v. Superior Court (McGinnis), 31 Cal.4th 1026 (2003).
Beyond supporting the defendant-employer’s defense, a properly conducted investigation can also be valuable to employers to help mitigate damages. When awarding damages, courts and juries consider whether the employer took remedial action — including discipline, retraining or reassignment — in response to an investigation. In addition, an employer can point to a timely and impartial investigation as evidence that its conduct was not reckless or malicious, an essential element a plaintiff must establish to receive an award of punitive damages.
For Plaintiffs: Investigations as Evidence of Employer Conduct
A workplace investigation can also provide strategic value to a plaintiff-employee’s case. It may provide evidence regarding how an employer handles internal complaints and whether it follows its stated procedures for resolving complaints. It can also be used to establish that a plaintiff-employee availed him or herself of such procedures in order to defeat the defendant-employer’s Faragher-Ellerth defense.
In addition, evidence surfaced by a workplace investigation can help bolster a plaintiff-employee’s discrimination, harassment or retaliation claim narrative. It can help show discriminatory treatment if similarly situated employees were treated better than the plaintiff-employee. It can bolster a hostile work environment claim if a defendant-employer had a pattern of inadequate responses to workplace issues. And it can help show retaliatory behavior if the plaintiff-employee was disciplined, demoted or terminated shortly after utilizing the employer’s internal procedures and cooperating with the investigation.
Finally, if an investigation is marred by delays or bias, a plaintiff-employee may use that procedural failure to demonstrate the employer was not genuinely committed to resolving the issue.
When Investigations Help Both Parties
While there are party-specific advantages to utilizing evidence of workplace investigations, there is also value that is equally beneficial to both parties: a thorough investigation helps clarify facts, identify what is in dispute, and narrow issues that will ultimately go before a judge, jury or arbitrator.
The factual clarity provided by an investigation often increases the likelihood of an early resolution through mediation or arbitration, saving both sides the expense and burden of protracted litigation. It can help the parties identify undisputed facts at an early stage, decreasing the number of issues to be resolved and thereby decreasing the time and resources required for both parties.
Additionally, timely investigations help to preserve crucial evidence and testimony. Pursuing an employment lawsuit can be an extended process, often taking several years to reach a final resolution. There is always a risk that, while the case progresses, witnesses become unavailable, memories fade, or evidence is destroyed in the regular course of business before a litigation hold is requested. A prompt investigation memorializes party and witness testimony and documentary evidence close to when the conduct in question occurred.
Finally, a workplace investigation can help to protect the reputation and credibility of both parties if it shows the parties were transparent and participated in good faith, whether it is a complainant, respondent or witness who cooperates in the investigation or an employer that promptly takes actions on its findings. Evidence of this conduct resonates positively with courts, juries and regulators alike.
Conclusion
A well-conducted workplace investigation can be a critical tool for both plaintiff-employees and defendant-employers in employment litigation, serving as persuasive evidence at trial and potentially leading to early resolution by shaping settlement negotiations. Courts continue to recognize that investigations are not just procedural exercises, but essential legal mechanisms that reflect on an organization’s culture and an individual’s credibility. Ultimately, good-faith investigations can shape good litigation strategy for both parties.
