Conducting Effective Employee Relations Investigations 

Build an Ethical Corporate Culture and Minimize the Risks of Legal Liability

The circular firing squad is an oft-used analogy for enforcement efforts gone wrong. But while the image is amusing in a sardonic way, the warning it conveys is deadly serious. Your company might have ample reason to investigate employee conduct and mete out discipline, but a sloppy process will ultimately do your organization more harm than good. So, before you yell, “Ready. Fire. AIM!” you might need to scrutinize your investigative processes, lest you jeopardize your company’s morale, reputation, and legal standing.

Companies today must adhere to heightened expectations when it comes to culture, compliance, and accountability. Thus, when a worker makes a complaint, (e.g., harassment, discrimination, retaliation, misconduct, or policy violation), leadership comes under intense scrutiny for the manner in which they conduct their employee relations investigations. When handled correctly, a thorough and fair ER investigation protects the company, supports the rights of employees, and demonstrates a commitment to ethical conduct. When mishandled, it exposes the organization to significant legal liability, regulatory penalties, and damage to employee trust.

ER investigations gone wrong: Five frightening examples
Revisiting our circular firing squad, here are recent cases in which a company failed to properly process an employee complaint and wound up paying the price for it.

1. EEOC v. North Georgia Foods, Inc. (North Carolina, 2023) —A team member at a Burger King franchise in Murphy, North Carolina, operated by North Georgia Foods, Inc., alleged sexual harassment from a male assistant manager. After its investigation, the company failed to discipline the alleged harasser, but terminated the complaining employee, prompting an EEOC lawsuit for sexual harassment and retaliation. The company eventually settled with the EEOC, awarding the worker $60,000 in back pay and compensatory damages, as well as injunctive relief (e.g., revised anti-harassment policies, mandatory training).

Where the company went wrong: The company’s deficient investigation failed to meet Title VII’s requirement to take reasonable steps to stop harassment, thus exposing the company to civil liability. The investigation was slow and skimpy. It lacked documentation of witness interviews, indicating a negligent refusal to take the complaint seriously. The employee’s termination was deemed a retaliatory response to the harassment complaint.

1. EEOC v. Morton Salt, Inc. (Ohio, 2024) — A Black employee at Morton Salt’s Ohio facility reported racial harassment, including a white coworker’s repeated use of racial slurs. The company’s investigation falsely accused the complaining worker of policy violations and terminated him, while the offending white employees faced no discipline. The EEOC filed a lawsuit in the U.S. District Court for the Northern District of Ohio (Civil Action No. 1:24-cv-01689). In 2024, the EEOC secured an undisclosed settlement, requiring Morton Salt to pay compensatory damages, implement anti-discrimination training, and revise investigation protocols.

Where the company went wrong: The company failed to investigate the harassment, made false accusations against the complaining worker, and committed a retaliatory firing.

1. Mendoza v. Western Medical Center Santa Ana (California, 2021, Appeal 2023) Romeo Mendoza, a 20-year veteran nurse at Western Medical Center, reported sexual harassment by a coworker. The hospital’s investigation concluded the claims were unsubstantiated and terminated Mendoza, alleging performance issues. Mendoza sued, claiming the investigation was a pretext for retaliation. Mendoza won a damage judgment at trial, which was upheld on appeal.

Where the company went wrong: The California Court of Appeal called the company’s investigation “grossly inadequate,” due to its cursory witness interviews and failure to document its findings. The hospital’s emphasis on “cleaning up the mess” rather than seeking the truth suggested retaliatory animus in Mendoza’s termination. On remand, the hospital faced potential punitive damages.

1. EEOC v. Genesh, Inc. (Kansas, 2024) — Female employees, including teenagers, at a Burger King franchise operated by Genesh, Inc., in Kansas, alleged sexual harassment by supervisors, consisting of inappropriate touching and sexual comments. One complaining worker was removed from the schedule for months, and the company failed to investigate. The EEOC filed suit prompting Genesh, Inc. to settle for $261,000, covering back pay and compensatory damages, as well as equitable relief (e.g., policy revisions, training).

Where the company went wrong: Neglecting a teenager’s sexual harassment claim is a fast track to legal trouble. The supervisors’ actions had created a hostile work environment under Title VII, and the company’s failure to investigate violated Title VII’s duty to act promptly. Removing the complainant from the schedule was retaliatory.

1. EEOC v. United Airlines (Colorado, 2024) — An employee of Mongolian descent at United Airlines was harassed by a manager who used a racial slur (“chink”) and physically assaulted him during the COVID-19 pandemic. The employee reported the incident, but United failed to investigate for months, leading to his resignation. The EEOC filed suit in 2024, leading United to settle for an undisclosed amount of damages. United also agreed to implement anti-harassment training and revise investigation protocols.

Where the company went wrong: The manager’s actions created a hostile work environment under Title VII, which prohibits mistreatment based on race or ethnicity. United’s delayed investigation violated Title VII’s duty to act promptly.

The company’s failure to investigate forced the employee to resign, equivalent to wrongful (retaliatory) termination.

From these examples, we can see how a company’s failure to properly investigate workers’ allegations of mistreatment make matters far worse. Leadership might feel that admitting a problem occurred shows the company in a bad light, but it’s better to admit you’ve got one bad apple then to give the impression your whole barrel is spoiled.

Why Comprehensive ER Investigations Matter

Effective ER investigations are part of an ethical corporate culture, where policies are enforced and bad actors face appropriate discipline. The benefits of an effective investigation include:

Protecting employee rights and company integrity — At its core, a workplace investigation is about uncovering the truth in response to a complaint or concern. Employees deserve a safe and respectful work environment. When they raise issues — whether through HR, a hotline, or informally — they expect to be heard and treated fairly. A strong ER process builds trust and reinforces the company’s commitment to justice and respect.

Ensuring fairness and objectivity — A well-executed investigation prioritizes impartiality, due process, and documentation. This not only helps determine whether wrongdoing occurred but also ensures that decisions are based on evidence rather than assumption or bias. Skipping steps or rushing to judgment can result in unfair disciplinary actions or even wrongful termination lawsuits.

Maintaining Compliance with Federal and State Laws — Employers are legally obligated to investigate certain types of complaints — especially those involving harassment, discrimination, retaliation, and safety violations. Agencies like the Equal Employment Opportunity Commission (EEOC) and the US Department of Labor (DOL) expect employers to act promptly and thoroughly. A lack of investigation, or one that appears biased or incomplete, can become Exhibit A in an enforcement action.

Protecting Against Legal Liability — Failing to investigate — or doing it poorly — can lead to significant legal exposure, including:

• Wrongful termination claims
• Hostile work environment lawsuits
• Retaliation claims if an employee is punished for reporting misconduct
• Negligent retention or supervision claims if an offending employee is left unchecked
• Fines and penalties from regulators for noncompliance. Courts often consider the quality of an employer’s investigation when determining liability.

A court generally views an employer more favorably when evidence shows a consistent and thorough process, even if the ultimate outcome wasn’t perfect.

Common Pitfalls That Increase Legal Risk

The red flags of a poorly conducted investigation include:

• Failing to document findings and actions taken
• Delays in beginning or concluding the investigation
• Bias or conflict of interest from the investigator
• Not interviewing all relevant witnesses
• Retaliating — even subtly — against complainants or witnesses
• Inconsistent application of company policies

These missteps not only compromise the integrity of the investigation but also create fertile ground for legal claims.

Best Practices for Conducting Strong Investigations

Companies that wish to deal forthrightly with employee complaints must adhere to these principles:

• Act promptly — Begin the investigation as soon as possible after receiving a complaint.
• Use trained investigators — Ensure those conducting the investigation understand employment law, company policy, and proper investigative techniques.
• Maintain confidentiality — Share information only on a need-to-know basis to preserve privacy and avoid retaliation.
• Be thorough and objective — Interview all relevant parties, gather documentation, and avoid assumptions.
• Document everything — Keep detailed records of interviews, findings, and conclusions.
• Follow up and provide closure — Communicate the outcome to appropriate parties and follow up with corrective action as needed.

When organizations attempt to shortcut the process or rely on untrained internal resources, they expose themselves to legal liability, reputational harm, and long-term damage to workplace culture. By contrast, a professional and effective process reinforces the positive attributes of an ethical corporate culture, which makes for a healthy and productive organization.

Investing in the right processes for lasting benefits

Investing in the right process today is a strategic move — not just for compliance, but to reinforce accountability and trust across your workforce.

At North American Forensic Accounting, our team of seasoned HR experts brings deep investigative experience and specialized training to support organizations in conducting thorough, defensible ER investigations. We understand that a comprehensive ER investigation isn’t just a checkbox — it’s a critical element of corporate integrity, risk mitigation, and ethical leadership.

Our experts work alongside HR professionals and leadership teams to build and implement standardized, legally sound investigation protocols that protect both employees and the organization.

Now is the time to evaluate your ER investigation readiness.

• Do you have a consistent and documented protocol in place?
• Are your internal investigators properly trained and impartial?
• Are you confident your investigations would stand up under legal scrutiny?

If the answer to any of these questions is either no or uncertain, our team is here to help. With deep expertise in HR investigations, employment law, and forensic review, North American Forensic Accounting empowers organizations to respond confidently, proactively, and effectively — before a crisis occurs.

• Small company? We can conduct employee relations investigations for you.
• Larger company? We can work with your investigative team to develop investigation strategies and executable plans.

To learn how NAFA can help you implement the best practices for ER investigations in your organization. Contact us today.