Fenwick Employment Brief - September 2013: Findings that Employee Violated Company Policies were not an Admission of Legal Violations

more+
less-

In Oliver v. Microsoft Corp., a federal district court in California ruled that Microsoft’s internal determination that the plaintiff’s supervisor violated the company’s discrimination and retaliation policies was not an admission that Microsoft violated the law.

Oliver was a long time employee of Microsoft who alleged that her supervisor discriminated and retaliated against her on account of her gender and medical condition (breast cancer). After Oliver and four other female employees filed an internal complaint of gender discrimination against the supervisor, Microsoft investigated the matter and determined that, among other things, the supervisor made inappropriate, gender-related remarks, engaged in adverse treatment of Oliver due to her medical condition and lowered her performance rating for non-business reasons in favor of a male employee. Microsoft concluded that the supervisor’s actions violated the company’s anti-discrimination and retaliation policies, and terminated the supervisor as a result.

In her lawsuit, Oliver argued that because Microsoft had admitted to violations of its own internal discrimination and retaliation policies, it effectively conceded that Oliver was subjected to unlawful conduct. However, the court found that because Microsoft’s policies set higher standards than the law, a violation of those higher standards did not necessarily mean that a legal violation occurred. Ultimately, the court determined that summary judgment in favor of Microsoft was appropriate because, notwithstanding the results of the company’s internal investigation, there was insufficient evidence to create jury issues regarding the claims of discrimination and retaliation.

Despite the positive result for the employer in Oliver, the case serves as an important reminder that internal investigative findings may impact related lawsuits or arbitrations. At the outset of any employee investigation, employers should carefully consider the scope and extent to which it may wish to protect the investigation from disclosure (for example, through the attorney-client privilege). Investigators should also be aware of how they make, and if needed, publish, their findings and conclusions.

Internal discrimination and retaliation policies should also be examined to ensure that the policies do not restrict the ability of employers to discipline employees. Policies should provide employers the discretion to discipline employees for improper conduct that does not necessarily rise to the level of a legal violation. Moreover, policies should be drafted to avoid giving the impression that a policy violation is the equivalent of a violation of law.