Labor: Employee investigations—in some circuits, you can rely on what you know

Circuit decisions offer a reminder about the importance of conducting an investigation before disciplining or terminating employees

During tough economic times, when employee productivity is vital, employers may need to be especially cautious regarding employee abuse of leave rights. This is especially so during the fall and holiday season when employees may be looking to obtain a few extra days off in whatever way they can. The intricate web of employee rights and employer obligations under the Family and Medical Leave Act (FMLA) makes this area ripe for abuse. Contributing to the potential confusion are rights to unpaid leave as a reasonable accommodation under the Americans with Disabilities Act (ADA) and any State-based rights that might exist. For example, the Wisconsin FMLA provides different leave substitution and time allotments for unpaid leave rights than federal law.

Thus, it is no surprise that employers may become suspicious of whether an employee is really taking leave due to a serious health condition or attempting to take advantage of the law to engage in recreational activity. A recent decision out of the 8th Circuit reminds employers they can rely on their investigations in good faith to respond to illegitimate employee activity without concern that the decision will be second-guessed by a court of law.

In Pulczinski v. Trinity Structural Towers, Inc., the 8th Circuit affirmed its commitment to the “honest belief rule,” which allows an employer to rely on its findings following an investigation to make an adverse employment decision against an employee. The employee at issue alleged the employer violated the ADA Act and the FMLA when he was terminated for his absence and causing a slowdown in work. As a crew lead painter, the plaintiff was required to work on weekends when other employees on his team volunteered to work overtime on the weekend. The plaintiff’s son suffered from cerebral palsy and severe asthma, and he notified his employer of those conditions. One weekend, when he was scheduled to work, the plaintiff called in to inform the employer he would not be present allegedly due to his son’s adverse reaction to medication. However, the employer’s investigation revealed employee testimony that the plaintiff discouraged others from volunteering that weekend so that he could go to the casino. The employer relied on this information to discharge the plaintiff from employment.

As explained by the court, the 8th Circuit’s adherence to the honest belief rule is consistent with the 7th Circuit. The 8th Circuit’s jurisdiction extends to employers in Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota. The neighboring 7th Circuit covers employers in Illinois, Indiana and Wisconsin. Any argument an employee may present that the employer’s understanding is in error does not, in itself, demonstrate that an employer’s decision violated an equal protection law. In Pulczinski, plaintiff’s claim that the employer’s conclusions were wrong was insufficient to demonstrate the employer violated the Americans with Disabilities Act. The 8th Circuit explained that merely demonstrating an employer’s understanding was not correct does not demonstrate that the adverse decision was based on the employee’s protected status. Rather, an employee would have to demonstrate the employer did not actually believe the employee violated any rule to show pretext.

The 8th Circuit’s decision specifically rejected the modified honest belief rule followed by the 6th Circuit, which covers employers in Kentucky, Michigan, Ohio and Tennessee. The modified honest belief rule of the 6th Circuit maintains that an employer must reasonably rely on the conclusions of an investigation when making an adverse employment decision. In determining whether the employer “reasonably relied” on the facts that developed in its investigation, 6th Circuit courts examine whether the adverse resolution by the employer was based on a reasonably informed and considered decision. If an employee can present evidence showing the decision was not reasonably informed and considered, then the court may find the employer’s reasons for discipline or discharge are pretext for unlawful discrimination.

The Pulczinski case is a good reminder for employers in the 7th and 8th Circuits of the importance of conducting an investigation before disciplining or terminating an employee. If the employee is a member of a protected class, producing evidence of an investigation that revealed the employee engaged in unprotected conduct may help defeat any later claims of discrimination. In the 6th Circuit, however, employers will want to take greater care to ensure that the investigation is thorough and think critically about potential issues related to that inquiry, including whether all witnesses were interviewed, whether the employee at issue was interviewed, and whether any other significant sources of evidence were considered. A less thorough effort risks a finding of pretext by courts in the 6th Circuit. Employers should consult counsel well-versed in this area of the law to determine whether their employee investigation strategy and practice meets their jurisdiction’s requirements.

Contributing Author

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Mark Spognardi

Mark Spognardi is a partner at Arnstein & Lehr. He focuses on representing management in traditional and non-traditional labor and employment law matters, including counseling,...

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Contributing Author

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Jesse Dill

Jesse R. Dill is an associate in the Milwaukee office of Arnstein & Lehr. He is a member of the firm’s Labor & Employment Practice Group....

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