Introduction
Making its debut in our European Investigation Guide is a topic in which we witnessed an undeniable increase in awareness with our clients over the past few years: Transgressive behaviour.
This can manifest itself in many forms. The #MeToo movement tried to break an age-old taboo on speaking openly about abuse of power and sexual offences. The movement and the number of cases which came to light in its wake in various countries and industries, led to a renewed interest in compliance standards to prevent them. There is also an increased societal awareness to forms of (sexual) transgressions, racism, discrimination on the basis of religion or belief, disability, age or sexual identity, bullying, and other forms of unequal treatment. For the purpose of this editorial we understand transgressive behaviour to include any form of abuse of power and authority in which professional and personal boundaries are not respected in the context of the workplace. It will specifically focus on employer obligations in this regard.
Legal Framework
The legal sources on this topic are scattered: On a supranational level, provisions for the protection against unequal treatment in the workplace can be found in the Violence and Harassment Convention (2019) of the International Labour Organisation (ILO), hereafter and its recommendation R206 – Violence and Harassment Recommendation, 2019. On a European level, various Directives exist. Although these sources do not apply directly, their provisions found their way into different areas of local law. Potentially applicable local laws include in particular criminal law provisions and employer obligations.
Relevant Criminal Law Provisions
When investigating allegations of transgressive behaviour, it is important to differentiate whether the alleged behaviour would result in violations of behavioural/moral standards, internal policies or if the case even involves criminally relevant behaviour.
Applicable criminal law provisions include in particular provisions on:
- Insult and defamation;
- Secret image or sound recordings;
- Data privacy violations; and
- Sexual harassment and rape.
Employer Obligations – Example Germany
In Germany, provisions on the prevention of unequal treatment in the workplace can be found in the General Act on Equal Treatment (Allgemeines Gleichbehandlungsgesetz, the "AGG") and employment legislation.
The AGG prohibits both direct and indirect forms of unequal treatment in a work context. Sexual harassment is considered a specific category of unequal treatment (paragraph 3 under 4 AGG). The AGG (Subsection 2) requires employers to take preventive measures, investigate potential cases and take repressive measures. Paragraph 12 under 1 AGG of said subsection stipulates that employers are "required to take measures necessary to ensure protection against unequal treatment". This explicitly includes preventive measures. What these preventive measures entail is explained in subparagraphs 2 to 5. Key measure is to appropriately train and educate employees on the inadmissibility of unequal treatment and to ensure that it does not occur in the first place. Such training can be incorporated into employees' regular vocational training or further education. Employers also have the obligation to promote reporting channels and inform employees thereof. This may be done by putting up a notice or place information leaflets at a suitable location, or by using the information channels normally used within the company (paragraph 12 under 5 AGG). That way, employees know when, where and who to turn to.
Paragraph 13 AGG stipulates the employee's right to report cases of unequal treatment. According to paragraph 12 under 3 and 4, the report has to be examined/investigated: The employer must take appropriate, necessary and suitable measures to put a halt to the unequal treatment. This is an implicit obligation to perform an internal investigation, since in order to decide which measures to take, one has to know the facts of the case. Examples of measures are the cautioning, moving, relocating or dismissal of the employee in question (paragraph 12 under 3 and 4 AGG). The reporter needs to be informed of the outcome of the investigation.
If a plausible report is not investigated or appropriately addressed, the employee has the right to refuse performance of work, without loss of pay, insofar as this is necessary for their protection (specifically against (sexual) harassment), while the employer risks being held liable (paragraph 15 AGG): If the offence reoccurs, the employer is considered to not have reacted appropriately to the first offence, making the employer liable for damages and compensation.
Preventive Compliance
A successful compliance strategy against unequal treatment or transgressive behaviour is threefold and focuses on 1) preventive measures; 2) the protection and prevention of the individual employee whom has been mistreated and; 3) the enforcement of measures and remedies once unequal treatment has been established. The strategy should include the training, advice and awareness-raising amongst employees; a clear Tone from the Top promoting a healthy and safe company culture, making available material clarifying which type of behaviour is appropriate and which is unacceptable, training in and promoting the Code of Conduct or other relevant policies such as the Anti-Harassment Policy, and the establishment, promotion and opening of an internal reporting point.
Not addressing reports of unequal treatment is not just against the legal provisions mentioned above, but also constitutes a reputational risk and liability for the company. These cases could be considered a signal that the work culture requires attention. Regular employee surveys may be implemented to get clarity in this regard. In addition, transgressive behaviour such as racism or sexual harassment, have a high threshold for reporting and an equally dark number of unreported cases. They require a different approach than 'classic' compliance cases, such as fraud or money-laundering.
Internal Investigations
Special Considerations for Internal Investigations
Internal investigations into unequal treatment and transgressive behaviour roughly follow the lines of a regular investigation. However, there are specificities to keep in mind, such as the high threshold to report, the composition of the investigative team, the interview setting, duration of the investigation, evidence-gathering, involvement of authorities and documentation:
- Plausibility check: The first step is the review of the plausibility of the report: Is it manifestly unfounded, pure conjecture or evidently based on rumours, or not even a compliance or company matter in the first place, but a private one?
- The investigating team: There is no explicit legal provision regarding the persons who should be on the investigating team. In practice, the HR department is often a logical choice, with its expertise in employment issues, and overview of the persons in and structures of the company. On the other hand, the legal or compliance department will have more experience and specific expertise in leading internal investigations and be more aware of potential overlap with other fields of law, such as criminal law. In any case, close cooperation between the two departments is advised, in a way that one might take over the case from the other in case of i.e. a conflict of interest. The composition of the team should be based on the individual professional expertise, ability to show empathy while guarding neutrality and objectivity. A small team with a high level of integrity safeguards their duty of care, facilitates communication with the person impacted by the alleged transgression, thus limiting the risk of liability and damages. An external investigator or consultant may be involved in case of limited capacity of the in-company investigation team – in particular in time sensitive cases – and when there is a high reputational risk (when the topic is sensitive and/or the accused employee is high profile). In many cases, working with mixed-gender investigations teams has proven to be helpful.
- Guiding principles: As described above, confidentiality and neutrality are especially important: Both parties need to be given a fair opportunity to comment on the allegations. Due to the personal and private nature of the transgressions, it is imperative that information is handled discretely and appropriately. Empathy is a must and appropriate handling of sensitive and personal information. This prevents further escalation and damages. Additionally, swift and thorough evidence-gathering is crucial. This is especially relevant for cases of harassment, since such incidents often occur in an intimate setting, with a lack of evidence to follow.
- The Interviews: The interviews should be conducted in an appropriate setting, preferably be carried out by a small, professionally experienced team that is committed to confidentiality. Interviewers must maintain their neutrality, at the same time have the necessary sensitivity. It should be avoided to conduct interviews twice, which could risk revictimisation. More important than in other investigations, the credibility of interviewees and interview statements needs to be assessed. Therefore, interviewers should also be experienced investigators. However, if possible it should be avoided to having to assess an allegation solely based on personal statements.
- No standard approach: Each case is different, especially with such personal experiences as violence and harassment. The factor time is also more important than usual here, due to the heavy reliance on personal statements/memories and lack of the usual paper trail, compared to i.e. financial and fraud internal investigations. Slow response times can significantly complicate an investigation. A long and dragging investigation prevents the affected person to find closure.
Conclusion - Main Obligations for Employers
Implementing effective compliance measures is becoming increasingly important to address corporate and management liability as companies are more frequently faced with reports on transgressive behaviour. Being prepared for this means having a solid preventive strategy from the get-go and a well-trained team that can provide a quick response the moment a report is filed, fitting for the type of transgression and individual factors of the case. Due to the subjective nature of these cases, swift and proper documentation is crucial. In any case, cultivating a healthy corporate culture is fundamental to an effective prevention strategy.
Désirée Maier
Partner
Hogan Lovells Munich
T +49 89 29012 340
E desiree.maier@hoganlovells.com |
Désirée Maier focuses on white collar, compliance, and internal investigations. She advises national and international clients, in particular from the life sciences industry. One focus of her work lies in the set-up and management of internal investigations. She has particular experience in advising during dawn raids and conducting cross-border investigations of potential breaches of criminal law or compliance regulations. In doing so, she is able to manage the different requirements from local law and U.S. law. She regularly communicates with German, U.S., and other enforcement authorities. Désirée also advises clients on the establishment and enforcement of global compliance systems, including the performance of compliance audits to ensure these respond to regulators' expectations. Moreover, she has expertise in supporting clients in the defence against criminal law charges and providing advice on recovery issues in relation to claims arising from compliance matters. As part of a secondment, Désirée also worked in the U.S. legal department of a world's leading U.S. pharmaceutical company (Fortune 500) with a global responsibility for investigations. |
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Dr. Angelina Leder
Partner
Hogan Lovells Munich
T +49 89 29012 358
E angelina.leder@hoganlovells.com |
Angelina Leder advises our clients, including numerous DAX 40 and Fortune 500 companies, on issues regarding commercial criminal law and on topics related to compliance and internal investigations. Angelina advises national and international companies in particular on the set up and management of internal investigations. She has specific experience in accompanying dawn raids, communicating with authorities and conducting interviews. Angelina also advises on the creation and implementation of global compliance systems. She has provided in house support as part of a secondment to the compliance department of a globally acting company from the automotive industry in Germany and the USA. |
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Silvia Gardini
Senior Business Lawyer
Hogan Lovells Munich
T +49 89 29012 565
E silvia.gardini@hoganlovells.com |
Silvia Gardini helps her clients navigate complex and highly regulated fields of law. She does this by combining her legal background in Life Sciences with her experience in internal investigations. Her experience in assisting pharmaceutical companies with life cycle management issues and advertising and promotion questions, enables her to advise national and international companies on a broad spectrum of Compliance topics. As part of a secondment, Silvia Gardini assisted a leading Pharmaceutical company (Fortune 500), at its Dutch branch as Legal Director a.i. Silvia joined Hogan Lovells' Amsterdam office in 2014 and the Munich office in 2018. |