When an employee alleges wrongdoing, you’ll need to conduct a thorough internal investigation. That may mean interviewing employees, supervisors and even customers.
But be careful how much information you share with those you interview. If you indiscriminately discuss the comments of others who were interviewed, it may constitute defamation. Texas law only protects communications made in the course of a wrongdoing investigation if disclosure is limited to people who have a legitimate reason to know.
Recent case: J.C. Penney fired Darlene Crouch from her job after an investigation concluded she intimidated other employees with tales of violent acts she and her family members had perpetrated. The investigation also found she had pointed a pocketknife at the employee who initiated the complaint.
Crouch sued, alleging (among other claims) that she had been defamed by the employee who said she had pointed the knife. J.C. Penney asked the court to dismiss the case because the statements the employee made were privileged.
The court agreed in principle, but said a jury was best qualified to determine if the company had controlled the dissemination of the alleged false statement about the knife. Privilege, concluded the court, protects only employers that can show the statements were communicated without malice. (Crouch v. J.C. Penney, No. 4:06-CV-113, ED TX, 2007)
Final note: Interview employees separately and don’t tell them what others said.