Two female employees complained that Silva, the store manager, sexually harassed them. The alleged harassment included grabbing and slapping the employees on the buttocks. Other employees confirmed the incidents and related other examples of Silva’s inappropriate behavior around female staff. Lucky terminated Silva, who then sued, claiming breach of an implied contract to terminate only for “just cause.” The lower court dismissed the case. On Silva’s appeal, the Court of Appeal agreed that Silva was terminated in “good faith” and dismissed the case.1

The Court of Appeal noted that the employer presented evidence that supported a good-faith investigation, including:

• The company maintained a written policy that specified how sexual harassment allegations were to be investigated. The policy stated that:
• Complaints must be treated seriously and investigated immediately.
• The matter must be treated confidentially.
• Interviews must be conducted in a private area.
• The investigator must listen to the allegations, make complete notes, attempt to identify all people involved and all possible witnesses and interview the accused employee.
• The company designated a specific employee to investigate complaints of sexual harassment. His practice was to interview the employee against whom the allegation had been made and any employees who may have witnessed the alleged conduct. The designated employee interviewed 15 store employees, recorded the information that he obtained from each witness on a witness interview form and/or obtained a written statement from each witness.
• The investigator was not involved in the allegations. He was trained by in-house counsel on how to conduct an investigation. His investigation was prompt. He kept written documentation of his interviews with witnesses. He asked important witnesses to provide their own written statements about the events.
• The investigator asked relevant, open-ended and non-leading questions. He attempted to elicit facts rather than opinions or suppositions. He maintained confidentiality by conducting some of the interviews off store premises or by telephone. He encouraged witnesses to page him if they wanted to speak with him further. The investigator’s notes revealed that the employees whom he interviewed generally were happy with their jobs, an indicator that these were not disgruntled employees bent on causing trouble for Silva or others.
• The accused was promptly notified of the sexual harassment claims and given an opportunity to present his version of the incidents and to provide follow-up information. Witnesses received an opportunity to clarify or correct information provided by themselves or others.
• The accused was given a final opportunity to comment on the information that was obtained during the investigation.

This case illustrates the need to train individuals designated as investigators and the need to establish written policies about complaint and investigation procedures.

1. Silva v. Lucky Stores, Inc., 65 Cal. App. 4th 256 (1998)