Termination of supervisor for failure to cooperate in investigation upheld
 June 28, 2013

John McGrory worked for Applied Signal Technology, Inc. as a section manager and promoted to department manager, supervising 12 employees who reported directly to him. In consultation with the HR Department, he gave a female employee a documented verbal warning for poor work performance and a written performance improvement plan (PIP). Instead of signing the PIP, the employee filed a complaint accusing McGrory of discriminating against her based on her gender and sexual orientation.

In response, the company brought in an outside attorney to investigate. Her report exonerated him of discrimination based on gender and sexual orientation and confirmed that the employee did have performance issues. However, the report also found McGrory was uncooperative and untruthful during the investigation, refusing to disclose his rankings of subordinates and the identities of people who had complained about the affected employee. The report concluded, based in part on his own admissions, that McGrory violated the employer's policies on sexual harassment and business/personal ethics by regularly making comments or jokes of a sexual or racial nature. He even shared some jokes with the investigating attorney. He was then fired.

McGrory sued for wrongful termination in violation of public policy (for firing him based on his protected participation in an internal investigation) and defamation. A judge dismissed the suit and McGrory appealed. He relied on the Fair Employment and Housing Act (FEHA), which makes it unlawful for any employer to "discharge, expel, or otherwise discriminate against any person because the person has filed a complaint, testified, or assisted in any proceeding" under FEHA. The court of appeals ruled that FEHA doesn't shield an employee from termination or lesser discipline for either lying or withholding information during an employer's internal investigation of a discrimination claim. He also asserted that his role in the investigation was protected by public policy. The court ruled that FEHA does not protect deceptive activity during an internal investigation, and such conduct was a legitimate reason to terminate him. The court also found that McGrory's violation of employer policies and the employer's interest in thoroughly investigating alleged discrimination were legitimate reasons for termination.

McGrory also alleged that he was slandered when at least one of his former coworkers asked why he was terminated and AST's HR vice president responded that he was uncooperative in the investigation despite receiving several warnings. Under California law, a communication made without malice to a person with an interest in the matter communicated is privileged if made by a person who (1) also has an interest in the matter communicated; (2) has such a relationship with the interested person as to provide reasonable grounds for supposing the motive for the communication is innocent; or (3) Is requested by the interested person to give the information. The "common interest privilege" applied in this case.

Prevention Strategies: Strong policies prohibiting retaliation against employees who provide truthful information in an internal investigation are vital. But, every person interviewed should be informed that no matter what the facts may be, three things are essential: (1) they are expected to cooperate; (2) they must be truthful; and (3) they must not retaliate or threaten anyone involved in the investigation.


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