How Legal Departments Should Face Workplace Complaints From HR Employees

What if the employee complaining of discrimination, retaliation, or other illegal conduct is your company’s human resources manager? This horror story is surprisingly common. Workplace complaints from HR employees present unique challenges for the company – and headaches for its legal department.

Two recent court filings illustrate the problem: In November 2024, the HR director for Newport Beach, California, sued the city seeking unspecified damages for a hostile work environment, gender and age discrimination, and whistleblowing retaliation, all arising out of the treatment she claims she received after urging the city to investigate potential wrongdoing by its city manager and fire chief. In December 2024, Dow Chemical was sued under the Americans with Disabilities Act (ADA) and Family and Medical Leave Act (FMLA) by a former HR employee who claimed he was terminated for having cancer.

Although these types of lawsuits are always challenging for businesses, the situation is far worse when the plaintiff is an HR professional for several reasons.

First, the HR professional knows where the bodies are buried. Past problems, embarrassing stories, or anything else the company would rather not see exposed are at the HR professional’s fingertips. HR is trusted with all kinds of confidential information. By nature of their job duties, these team members know far more about the company’s personnel processes than other employees. They can quickly point to discrepancies in treatment and identify other employees who may have received preferential treatment. They know the importance of documentation and often have meticulous notes and recordings of conversations with managers. They understand how the company approaches claims, strategizes its defense, values a case, and decides when to settle and how much to offer.

The HR professional-turned-plaintiff also poses potential conflicts of interest for the company, particularly if he or she is still employed. Typically, the company’s HR department conducts investigations into discrimination and retaliation complaints. That’s not possible when the complainant is or was in HR. Even if you can isolate the complainant from the investigation, the remaining HR staff cannot be expected to be objective about a colleague with whom they have worked closely. This can lead to biased investigations and potential legal issues.

Avoiding Legal Pitfalls While Investigating the Matter

When faced with such situations, it is crucial to have a well-thought-out plan and effective coordination. Retaining an outside investigator, likely an attorney, to review and determine the validity of the claim is a key part of this plan. The legal department should restrict the HR department’s access to information about handling the claim, as it should be expected that the complainant may have allies who could leak information. These precautions, when carefully planned and coordinated, can provide a sense of control in a potentially chaotic situation.

The HR department is expected to enforce the company’s non-discrimination policies. If an HR professional claims those policies have been violated, that will erode other employees’ faith in the company. They will start to see discrimination and unfair treatment everywhere.

Take the following precautions when dealing with complaints from HR employees:

1. 1. Select and retain HR professionals who understand the trust placed in them and the significance of their role in employee relations. Gossip and rumormongering cannot be tolerated in HR, where employees are required to maintain confidentiality. While an HR professional should not be too chatty, it’s also important that they be engaged with other employees and easily approachable.
   2. Hire outside counsel or investigators to investigate a complaint by HR or a complaint into HR. While legal departments should oversee this process, an outside perspective is beneficial and underscores the company’s commitment to transparency.
   3. Remember, HR has the same anti-retaliation rights as any employee. HR can (and often does) engage in protected activity, reporting, harassment, discrimination, and other law violations. HR-protected activity may also include an HR professional disagreeing with big-picture strategic thinking on company culture and toxic environments, so be mindful of giving a complaint or frustration by HR the same attention you would give to any employee complaint.
   4. When terminating HR, always consider a severance. It’s a simple business decision to keep those skeletons locked up!

When things go sour with an HR professional, the company’s response requires a proactive and prepared approach. It is essential to involve counsel from the first hint of trouble, ensuring that the company is ready to handle any potential HR-related issues.