When companies are alerted to potential violations of policy or relevant law, they frequently open internal investigations to determine the events that occurred and whether the circumstances require corrective action. Investigations are an important tool that any responsible company should be prepared to use, either on its own or with the assistance of counsel. But the details matter. A recent case from the U.S. District Court of Maryland raises pitfalls to avoid, including the failure to comply with an applicable collective bargaining agreement (CBA) when conducting employee interviews during an investigation.
What Was the Case About?
The case involved a company's investigation into whether its employee falsified training certificates required under the company's contract with the government, and whether that investigation provided the employee with the protections required under the operative CBA.
In Elite Protective Services, Inc., v. International Guards Union of America, Local 154, the employer (Elite) provided security services to federal government facilities in the greater Washington, DC metropolitan area. No. TJS-22-0974, 2023 WL 2185672, at *2 (D. Md. Feb. 23, 2023). As a result, Elite was required to staff the facilities with guards who met certain fitness and training requirements. Id. These included a mandatory 36-hour "Refresher Training" at least every three years. Id. at *3. A manager at Elite was responsible for certifying employee training in 2018 and 2019, but she had passed away when, in 2021, Elite learned of problems with some of its employees' training certifications. Id. Specifically, two guards admitted to submitting falsified training certifications for mandatory Refresher Training in 2018. Id. Even though their certification forms listed dates on which no training had occurred, the forms contained signatures from the since-deceased manager that (falsely) certified the employees' training. Id. Elite determined that another employee, Mr. Paul Ogordi, had essentially the same type of certification in his file. Id.
"Faced with losing its government contract because some of its employees had falsely certified their attendance at mandatory training, Elite launched an internal investigation" with the assistance of outside counsel. As a part of the investigation, Elite had its outside counsel and operations manager interview Mr. Ogordi in a three-part meeting. Id. Though the parties disputed what had actually happened during the three-part meeting, based, in part, on facts gathered during the meeting, Elite ultimately terminated Mr. Ogordi "'due to dishonesty and conduct involving [his] knowing and willful submission of falsified training documents and failure to complete the required training.'" Id.
What Happened to the Employer?
Mr. Ogordi was a member of the International Guards Union of America, Local 154, and his employment with Elite was subject to a CBA, including a provision in Article 1 that provided Elite's management with the right to discharge, discipline, or suspend employees "for just cause." See id. at *1-*3. Following his termination, and as a result of the CBA limit imposed by Article 1 on Elite's right to terminate union employees, Mr. Ogordi filed a grievance through the union, alleging that his termination was without just cause. Id. at *4. An arbitrator agreed with the union, finding that Elite had failed to show that it had just cause to terminate Mr. Ogordi. In particular, the arbitrator "expounded upon the 'procedural irregularities' that denied Mr. Ogordi his due process rights under the CBA." Id. at *4-*5.
In summary, the arbitrator made the following determinations regarding Elite's internal investigation:
- There was no evidence that Mr. Ogordi knowingly falsified the certification, despite his admission that he did not attend training on the dates listed;
- There was reason to believe that Mr. Ogordi's signature on the training certification form had been forged by the deceased manager, and Elite's investigation into this issue was "inadequate";
- Elite's interview with Mr. Ogordi was "devoid of the fundamental due process protections to which Mr. Ogordi was entitled under the just cause provision of the CBA" because Mr. Ogordi was not notified in advance that the purpose of the meeting was investigative and that disciplinary charges could result;
- Elite conducted an "inadequate investigation," overlooking the role other individuals may have played and relying heavily on the interview conducted by outside counsel in which Mr. Ogordi "purportedly gave 'inconsistent explanations'";
- An investigator's claim that Mr. Ogordi had admitted "Oh, that's my signature" during an interview could not be credited because it was "uncorroborated," and the arbitrator credited instead Mr. Ogordi's "consistent denials that his signature appeared on the Certification";
- Elite "[p]lac[ed] the onus on Ogordi to recall a refresher training that would have occurred two years earlier, without" a fair "opportunity" to "present his 'side of the story'";
- Elite's failure to call its outside counsel who attended the interview with Mr. Ogordi as a witness merited application of an adverse inference against Elite regarding what occurred during the interview; and
- Elite should not have relied on the "circumstantial evidence" of other guards at the location where Mr. Ogordi worked having submitted false certifications to terminate Mr. Ogordi.
Id. at *4-*6. The arbitrator "ordered Elite to reinstate Mr. Ogordi to his prior position, effective immediately, with full back pay, seniority credit, and commensurate benefits from the date of his termination through March 22, 2022." Id. at *6.
Elite filed a complaint in Maryland district court seeking to vacate the arbitration award against it, primarily on the basis that the arbitrator's adverse inference was improper because it ignored the fact that Elite's outside counsel could not testify due to attorney-client privilege. See id. at *6-*7. The magistrate judge assigned to the case disagreed, holding that the attorney-client privilege did not preclude the outside counsel from providing factual testimony as to what she saw or heard during the interview with Mr. Ogordi (even if her mental impressions and opinions were privileged). See id. at *7-*10. The magistrate judge then confirmed the arbitrator's opinion and award to Mr. Ogordi. Id. at *12.
What Can My Company Do to Ensure Our Investigations Hold Up in Court Later?
Based on the text of the magistrate judge's decision, reasonable minds can differ as to whether the arbitrator's interpretation of the terms of the CBA held Elite to an unrealistically high standard for the conduct of its internal investigation. Nonetheless, the case does serve as a reminder of several steps that companies should take to make sure their investigations reach proper conclusions that can easily be defended in litigation. These include:
- In the case of union employees, negotiate employment terms that specify what the company will and will not do in an investigation. Specificity in a CBA or other agreement can avoid situations in which parties later disagree regarding whether an investigation was "fair" or "just." For non-union employees, general information about what can be expected to occur during an investigation may also be referenced in an employee handbook, including that the company will conduct a prompt and impartial investigation, will uphold confidentiality to the extent feasible, and will expect employees' full cooperation.
- Identify any applicable employment agreement before beginning an investigation. Ensure that the interview and other investigative procedures comport with the terms of the operative CBA.
- Provide clear warnings and instructions at the outset of any interview conducted. All employees interviewed should be advised of the interviewer's obligation to the company and their right to be free from retaliation for their participation.
- Document interviews contemporaneously and in writing. This will help avoid allegations later that a company official's testimony regarding what occurred in the interview is "uncorroborated."
- Ensure that appropriate individuals attend. When possible, it is beneficial to have more than one company representative present for the witness interviews, so there is more than one management-side account of what occurred. Yet, attendance should remain limited to appropriate company personnel or counsel (as applicable).
- Explore alternative explanations for alleged misconduct. This may include interviewing additional witnesses beyond the complainant and accused to corroborate accounts provided and collecting/reviewing other available documentation and correspondence available related to the allegations.
- Document findings. The company should prepare an internal report or memorandum for its files that documents the investigation findings and includes the factual bases for such findings.
- Determine how to address requests for representation. Notwithstanding the provision of any agreement that may specify otherwise, the company should determine how it will handle requests to be represented by counsel during investigative interviews and administer such determination consistently.
Internal investigations are critical to corporations' ability to comply with relevant law and policy, and to maintaining their reputation within their industry and customer base—including federal agency customers. However, the Elite Protective Services, Inc. case reminds corporations that they should take proactive steps in negotiating their CBAs, should one exist or, at a minimum, update their company policies to account for potential internal and external investigations, and providing the company with the maximum ability to disclose and cooperate with customers and law enforcement authorities.