Respecting Employees’ Privacy Rights during an Internal Investigation

An employer must respect employees’ privacy rights when conducting internal investigations in response to a claim or allegation. However, at the same time, it is necessary and important for the employer to obtain all of the relevant factual information.In most instances, the investigation must be conducted promptly and thoroughly.

In conducting an investigation, employers must balance their right as an employer to investigate and take disciplinary action against an employee's right to be free from an unreasonable invasion of his or her privacy.It is very important that employers understand that employees who divulge information gained in an investigation to third parties potentially risk liability for defamation claims. In general, defamation is a false and unprivileged oral or written communication to a third party that injures the reputation of the employee.Employers have a qualified privilege to divulge even defamatory information to persons who have a demonstrated "need to know" of the information such as individuals conducting the investigation or those who implement the company’s disciplinary policies.However, the privilege can be lost if the information is disseminated or communicated to individuals who are not on a "need to know" basis or who are not employees of the company.

In many instances, employers, as part of the investigation process, will attempt to conduct surveillance or searches.Employers should be aware that there is potential liability for utilizing such procedures.To avoid invading an employee's privacy or violating wiretapping laws, the company should let employees know, in writing, that their calls are going to be monitored.Additionally, if surveillance is going to be conducted, any surveillance must be conducted in a reasonable manner.Surveillance is usually permissible when the employer can prove that there is a business related reason for the investigation.

If an employer is going to search work areas, files, or computers, a policy on searches should be contained in the Employee Handbook to dispel any expectation of privacy on the part of employees.All employees should understand and be aware of a company policy that allows the employer to conduct reasonable searches of desks, files, computers and other personal work areas when an employee is suspected of theft or other misconduct.

Internal investigations are necessary, but can also be pitfalls for privacy violations if not handled properly. For questions regarding conducting an internal investigation please contact a member of Barrett McNagny’s Labor and Employment Group. 

Additional reading: Guidelines for Conducting an Internal Investigation

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