A few weeks ago, I posted tips for conducting an effective investigation, noting that a good investigation can be an employer’s best friend, but that an improperly conducted investigation — and lack of follow up — can be a nightmare for an organization. See here for more information. A recent New Jersey trial court decision, Shanahan v. New Jersey Transit Corporation, reaffirms that such investigations are discoverable, such that employee litigants, and possibly juries, may have the opportunity to review and criticize the employer’s investigation and follow up.
In Shanahan, the plaintiff alleged that her employer, New Jersey Transit Corporation (NJT), subjected her to a hostile work environment based on her sexual orientation, and then retaliated against her when she complained about the harassment. To support her claims, the plaintiff demanded that NJT turn over four documents that contained a discussion, analysis and recommendations regarding the rise in discrimination complaints under the tenure of plaintiff’s supervisor, as well as data comparing disciplinary actions against white males and minority members, and data regarding trends in hiring of female officers. The court held that that these documents were clearly relevant, as the documents may have a tendency to prove or disprove that plaintiff’s supervisor had discriminatory motives, as well as to disprove the employer’s reasons for its actions against plaintiff.
After finding that the documents were relevant, the court then held that the documents were not privileged. More specifically, NJT argued that the documents were protected by the “deliberative process privilege,” which allows governmental agencies to withold documents that reflect advisory opinions, recommendations, and deliberations to help the agency formulate policies and decisions. The court rejected this argument, ruling that the deliberative privilege does not apply in employment discrimination cases. In reaching this result, the court cited Payton v. New Jersey Turnpike Authority, 148 N.J. 524 (1997), in which the New Jersey Supreme Court specifically held that investigations of discrimination complaints are not privileged, noting that “we particularly disfavor privileges in the employment-discrimination context.” Id.at 545. The Shanahan court further noted that, for the deliberative privilege to apply, the documents must contain opinions, recommendations or advice to help make decisions, and not just facts. Here, the court observed that the disputed documents contained only high level and general recommendation (e.g., “we do need to remain diligent in … insuring that their HR practices minimize the filing of complaints”) or recommended further review and analysis.
Finally, the court noted that at least one of the documents was never used in any deliberations. According to the court:
Ms. Illescas [the author of one of the reports] testified at her deposition that no action/no decision was ever made by Defendants in response to the T&J Associates report or her report. In fact the testimony of Ms. Illescas demonstrates that Defendants were dismissing these reports and findings and took no action whatsoever on them. Ms. Illescas testimony reveals that at least one of these reports (Ms. Illescas’ report) may have been used in a retaliatory fashion by Defendants.
In other words, not only was the document not protected by the deliberative process, the court found that it may support the plaintiff’s allegation of retaliation.
It would be a mistake for an employer to assume from this case that it should not investigate and/or document any potential areas for improvement. It is axiomatic that ann organization should not put its head in the sand, in the hopes that everything is fine, or that no one will find out that there are any issues if they do not document them. Rather, I have found that issues go to litigation precisely because they fester under an employer’s neglectful or unrealistic watch. Moreover, while juries may understand that no organization is perfect, they tend not to be sympathetic to employers that turn a blind eye to potentially unjust treatment, or that engage in “blame the victim and shoot the messenger” when issues are raised. Rather, a prudent employer should learn from this case that any investigation or issue may be discoverable, and that they should act as though all of their decisions and actions will see the light of day, and do the right thing.
This case is also a good reminder that there are numerous “investigative” records, besides formal investigations, that may document potential issues and recommendations, and which may be discoverable. Many companies have HR issue software, which track investigations and issues, and may include the ability to run various analyses. Following Sarbanes-Oxley, many companies routinely report audits and other issues to the Board of Directors and/or Audit Committee. The Federal Sentencing Guidelines recommends that organizations adopt compliance programs, which includes issue tracking asd part of risk assessments, as well as regular reports to compliance committees and senior management of issues and trends. Many companies have also implemented hotline reporting systems, from which different analytics can be run regarding trends and statistics, including rise or decline or various issues, as well as statistics regarding the company’s response, which may or may not demonstrate that the company took these complaints seriously, as well as whether employees felt comfortable raising concerns. Prudent employers would be wise to periodically review all of these documents to determine whether there are issues that need to be addressed. Depending on the specific facts, plaintiffs might also be wise to consider including these documents in their discovery requests.
A copy of the Shanahan decision is on file with the author, and can be provided on request.