Accusations, particularly of sexual harassment, are the news of the day. But a business can face a wide range of accusations any given day, such as the customer who “slips” in the parking lot, or another business which claims breach of contract or unfair competition, not to mention a wide range of employee issues. Misconduct can destroy a business, but negative publicity or internal unrest from false accusations can be equally destructive. Once these allegations are made, they must be investigated. How far can you or should you go to prove a claim against you or your business is false?
If you believe your business has been wrongfully accused, you are entitled to investigate whether facts exist that would rebut those accusations – right? Yes, but although there is a clear difference between debunking false allegations and doing so with unlawful or unethical conduct, sometimes exactly when the line is crossed may not be so clear. One bad act does not justify another, and the investigation itself can backfire and do more harm than good.
Recently, it came to light that Harvey Weinstein used elite intelligence agencies to conduct undercover investigations of his accusers, with the agents adopting false identities and befriending the alleged victims and reporters to gather information that could not only be used against them to undermine their credibility but also to coerce them into silence. While the quintessential smear campaign is an extreme example of counter intelligence at its worst, there are many examples of investigations-gone-bad.
Remember when Ralph Nader challenged the safety record of the automobile industry? In 1970, he settled a lawsuit with General Motors for $425,000 involving claims that GM operatives shadowed, wiretapped, eavesdropped, and threatened him, indiscriminately interviewed acquaintances about his intimate life, pried into his bank accounts, and hired women to entice him into illicit relationships. The court refused to dismiss Nader’s lawsuit against GM, holding that sometimes “surveillance may be so ‘overzealous' as to render it actionable.”
Also beware, most states require third parties who conduct investigations to be licensed by the state, and hiring a consultant without proper licensing can result in criminal and civil liability. Using an unlicensed investigator or employing unethical means can also spur a court to exclude not only the evidence unearthed during the investigation, but any evidence obtained as a result of the investigation as well.
A thorough investigation into the facts surrounding a dispute is absolutely necessary to obtain the evidence needed to prove your case, or disprove your opponent’s. Part and parcel to that investigation is determining the credibility of the accusers and witnesses, and gathering evidence to impeach any adverse testimony or allegations. However, business must proceed with extreme caution before undertaking any undercover operation. At a minimum, it may become a PR nightmare, but at its worst may sink your case or expose your business to additional liability. Consult experienced and ethical legal counsel to ensure that you are not inadvertently gathering (or creating) evidence that can, and will, be used against you in a court of law or public opinion.
