As an employer, you are obligated to investigate employee harassment and discrimination claims. How you handle those investigations can determine whether you’ll have to prepare for later lawsuits—concerning the investigations themselves. The problem: allegations that you defamed someone while conducting the investigation.
When conducting an investigation, be especially careful to stick to the facts and avoid speculation. Then, report the results only to those with a legitimate need to know the details.
Texas law protects employers from defamation lawsuits growing out of wrongful-conduct investigations. But that’s true only if the report remains confidential and limited to those who need to know the results—and nothing in the report was said with reckless disregard for the truth or knowledge that the information was false.
Recent case: Beneficial, a consumer loan company, discharged Linda Amezquita from her job as a senior account executive at its Laredo office.
After employees complained to the district manager that the workplace atmosphere was “negative,” Beneficial investigators spoke with everyone privately. Amezquita provided a different version of events than other employees did, leading investigators to conclude she was being less than honest. When she didn’t change her story after getting a second chance, the company fired her.
The employer then sent a report to another company hired to handle its unemployment compensation claims. The report recounted that other employees had said Amezquita had blocked an employee’s exit while trying to discuss a problem.
Amezquita sued, alleging defamation. She reasoned that the report accused her of a crime—false imprisonment—and was, therefore, libelous.
But the court threw out the claim because Texas law provides that employers are immune from “communications made in the course of an investigation following a report of employee wrongdoing” if the communication is limited to those who have a need to know the information and the employer neither knew nor should have known the information was false. (Amezquita v. Beneficial Texas, No. 06-41476, 5th Cir., 2008)
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