A Flawed Investigation Does Not Necessarily Equal Discrimination

Although the U.S. Court of Appeals for the Tenth Circuit asserted that a flawed investigation is not enough, on its own, to support a claim of discrimination, we caution employers to be thorough and impartial in investigations in order to avoid such arguments.

In Markley v. U.S. Bank National Association, a bank VP sued his employer, alleging that the stated reason for his termination – improperly giving commission credits to a subordinate – was pretext for age discrimination in violation of the Age Discrimination in Employment Act. In support of his claim, he contended that the employer conducted a “sham” investigation. Among other things, he argued that the investigator failed to conduct additional bank research and to review sales records and account histories. He questioned the choice of witnesses to interview as well as an allegedly inappropriate internet search for the VP’s social media history and review of personal emails. And he contended that he did not have the opportunity to respond to the allegations against him.

The Tenth Circuit, however, held that an employer’s failure to follow its own policies or an imperfect investigation alone does not establish pretext. As the Tenth Circuit explained, there could be many factors for flaws in an investigation, including a “less than diligent investigator.” Thus, “there must be some other indicator of protected-class-based discrimination for investigatory flaws to be capable of establishing pretext.” The Tenth Circuit further addressed the supposed flaws in question and determined that the investigator made logical choices about his investigatory activities. Moreover, while the VP identified additional steps the investigator could have taken, he did not provide any evidence that such steps would have produced valuable evidence to rebut the finding of misconduct. The Tenth Circuit further found that the VP had, in fact, been given an opportunity to respond to the allegations.

As we noted in our October 2022 E-Update, employees may not dictate how an employer’s investigation should be conducted. Although the present case reiterates this point, it is still important for employers to ensure that any investigation is thorough, reasonable, and appropriate for the situation. Ideally, this would include interviews of key witnesses, review of appropriate documents  (including ones that establish motive for the wrongdoing), and an opportunity for the employee to explain their side of the story prior to any disciplinary decision being made.