Extreme Pressure Tactics in Investigatory Interviews May Create Employer Liability

A recent decision from the Southern District of New York serves as a cautionary example for employers investigating suspected employee misconduct. Shkreli v. JPMorgan Chase Bank, N.A., 13 Civ. No. 5647 (LGS) (S.D.N.Y. March 27, 2015). During an internal review, JPMorgan Chase Bank (“Chase”) began to suspect that one of its Personal Bankers – Robert Shkreli – had filed false claims of identity theft with respect to various Chase credit card accounts opened in his name. Further review appeared to confirm these suspicions, and the investigator arranged a meeting with Shkreli. The events of the meeting are disputed, but Shkreli collapsed (apparently suffering a heart attack) before Chase’s investigator completed his questioning, and Shkreli was later diagnosed with Post Traumatic Stress Disorder (“PTSD”) “as a result of” the interview. When Chase met with Shkreli a second time about its suspicions almost two months later, he again experienced chest pains, and an ambulance was called. After Shkreli did not appear for a third interview, Chase sent him a list of questions in lieu of conducting an in-person interview. Based on Shkreli’s responses and further review of the relevant evidence, Chase determined that he had engaged in fraudulent conduct and terminated his employment.

Shkreli then sued his former employer in the Southern District of New York, alleging false imprisonment, intentional infliction of emotional distress (“IIED”), discrimination based on national origin, defamation, and various violations of the Fair Debt Collection Practices Act (“FDCPA”). On Chase’s motion, the district court dismissed Shkreli’s claims for discrimination, defamation, and violations of the FDCPA, but allowed his claims for false imprisonment and IIED to proceed to trial, based on Shkreli’s allegations about the investigator’s conduct during the interview.

Shkreli’s allegations are worth examining because of their relative rarity in an employment context. (As noted by the district court, IIED in particular is “a highly disfavored tort under New York law.”) Among other claims, Shkreli asserted that, during the first interview that resulted in Shkreli’s collapse and diagnosis for PTSD, Chase’s investigator: completely enclosed him in an empty conference room with the door shut; directly accused him of fraudulent conduct; screamed at him; threatened him with criminal prosecution, termination, permanent unemployment, and retribution by the investigator’s contacts in the New York City Police Department; refused to let Shkreli leave the room “so he could take his medications, which were in his car,” and – after Shkreli’s explanation that he may have a heart attack without the medication – followed him into the parking lot and “repeatedly mentioned his Police Department contacts and instructed [Shkreli] to confess,” until Shkreli collapsed. Based on these allegations and the fact that Shkreli had been diagnosed with PTSD, the court determined that – if believed by a jury – Shkreli’s accusations could form the basis of viable IIED and false imprisonment claims.

Chase’s account of this interview differs radically from Shkreli’s. However, Chase asserted that Shkreli simply wasn’t involuntarily confined, not that it would have been justified in confining Shkreli involuntarily, as we sometimes see in situations involving suspected shoplifting. What actually happened during Chase’s interviews of Shkreli will, barring settlement, be decided by a jury. Nonetheless, this case highlights the importance of thorough investigator training and oversight, as well as the importance of careful planning and documentation in every investigation. The allegations in this case may be unusual, but Shkreli illustrates the very real possibility that an overzealous investigator could expose his or her employer to potential liability.

While the following list is by no means exhaustive, there a number of questions that employers should always keep in mind when preparing for and conducting interviews of employees in the course of an investigation of suspected misconduct:

How will I document the investigation and my findings? The importance of developing accurate and contemporaneous records in connection with an investigation cannot be understated; in many cases, employers’ defenses to charges of wrongful conduct during an investigation – particularly when there are disputes about what happened, as in Shkreli – will sink or swim on the persuasiveness of its business records. To be credible, for example, the notes should at least be complete and factual, mention inconvenient facts or observations as well as helpful ones, and avoid legal language or a partisan or argumentative tone.

Is the employee represented by a union? If so, the employee may be entitled to have a union representative present, depending on the nature of the planned interview (these rights are commonly known as Weingarten rights).

Does the employee have a right to an attorney? The answer to this question is usually “no” (and almost always “no” for private sector employees), but there are exceptions.

Does the employee have any privacy rights? Can I search their office or possessions? For private sector employers, the answer to this question will typically depend on state law and the extent of the employer’s planned search. In New York, for example, employees generally do not have privacy rights that would prevent a search of their office space.

How will I respond if the employee becomes belligerent or hostile, or threatens legal action? Investigators should be properly trained to maintain professional detachment during employee interviews, to be conscious of their own and the employee’s safety, to prevent confrontations from escalating, and to respond appropriately to employee announcements of their intended actions, which may be lawful (such as contacting an attorney or filing a grievance) or unlawful (threatening defamation or breach of lawful confidentiality agreements).

How will I respond if the employee tries to leave the interview or refuses to answer my questions? An employer generally cannot physically compel employees to participate in an investigatory interview, but can inform them of the consequences of a refusal to cooperate, and confirm that they are willing to accept those consequences. Of course, the employer should verify that any such discipline would be lawful under the circumstances. (For example, if an employee has a right to union representation during the interview, disciplining the employee for choosing not to speak without a representative present would violate the National Labor Relations Act.)

There are many other legal and practical questions that will arise in preparing for investigatory interviews, and the answers to these questions (as well as those above) will vary widely based on factors such as the employee being interviewed, the status of the investigation, and an employer’s business concerns. Regardless, all employers should ensure that careful planning precedes any investigation of suspected misconduct, and thoroughly train any individuals who will be responsible for conducting the investigation prior to its implementation.

This post was written by : Nick Bauer

About the author : Mr. Bauer is an associate at boutique labor and employment law firm Collazo Florentino & Keil LLP.



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