Most employment lawyers have had the same conversation with a client. An executive, physician, salesperson, coach, or other highly visible employee has been accused of serious misconduct. The allegations are already circulating internally, if not publicly. Human resources wants to know whether the employee should be placed on leave, leadership is worried about customers and employees, and communications is drafting a statement. Everyone wants an answer before anyone has a complete picture of the facts.
The legal system moves deliberately; businesses do not. That disconnect explains why some of the most consequential employment decisions are made at the very beginning of a controversy, long before a court determines what actually happened.
The Shannon Sharpe Matter
The Shannon Sharpe matter illustrates the point. After a civil lawsuit accused Sharpe of sexual assault, he publicly denied the allegations, stepped away from his role at ESPN while the litigation was pending, and the dispute was later resolved through a confidential settlement. The terms of the settlement were not disclosed, the lawsuit was dismissed with prejudice, and the merits of the underlying allegations were never adjudicated in court. ESPN reportedly elected not to continue its relationship with Sharpe.
Those facts are notable, but they are not what employers should focus on. The more useful question is this: What was ESPN supposed to do while the facts remained disputed? That question arises every day in workplaces across the country. The employee is rarely a nationally recognized broadcaster, but the underlying problem is remarkably similar.
Employer Obligations During a Pending Investigation
An employer’s obligation is not to predict how a jury will eventually resolve a lawsuit. It is to make reasonable employment decisions based on the information available at the time. That distinction is easy to overlook. It is also the point where many employment cases are won or lost. Too often, these situations are viewed through the wrong lens. Months or years later, lawyers and commentators tend to ask whether the allegations ultimately proved true. Employers do not have the benefit of asking that question when the decisions actually matter. They must decide whether an employee should remain in the workplace, continue supervising others, represent the organization publicly, or retain access to sensitive information before the underlying dispute has been resolved.
That is why administrative leave has become such an important management tool. Employees sometimes view administrative leave as a disciplinary action, but it serves a different purpose when used appropriately. It creates breathing room, protects the integrity of an investigation, reduces unnecessary workplace friction, and allows decisionmakers to gather information before reaching conclusions that may be difficult to reverse. Whether administrative leave is appropriate depends on the circumstances. An allegation involving workplace violence presents different concerns than one involving financial misconduct, and both differ from allegations arising entirely outside the workplace. The analysis becomes even more nuanced when the employee occupies a public-facing role and the organization’s reputation is intertwined with that individual’s continued presence.
None of that means employers should equate allegations with misconduct. One of the more common mistakes employers make is allowing the urgency of the moment to substitute for a careful investigation. Public attention creates pressure to act quickly, but it does not reduce the employer’s obligation to conduct a fair process. If anything, the scrutiny demands greater discipline. Employment attorneys often tell clients that investigations should be conducted with future litigation in mind rather than tomorrow’s headlines. Every interview memorandum, every internal email, every decision about witness credibility may eventually appear as an exhibit in a deposition or summary judgment record. Months later, when memories have faded, the contemporaneous documentation frequently becomes the most persuasive evidence of what the employer knew and why it acted.
Contractual Provisions and Public Communications
For senior executives and other employees working under negotiated contracts, the analysis becomes even more complicated. Many executive agreements contain “for cause” provisions or morality clauses that permit termination for conduct that reflects adversely on the employer or exposes the organization to public embarrassment. Those provisions are often written broadly, but broad language is not the same as unlimited discretion. Courts generally begin with the language the parties negotiated, not with the employer’s understandable frustration over the allegations. This is one reason experienced counsel often spend more time reviewing the employment agreement than debating the underlying accusations. A poorly drafted “for cause” provision can create substantial litigation risk even where the employer has legitimate business reasons for ending the relationship.
Public statements deserve similar attention. Organizations naturally want to reassure employees, customers, and business partners that they are taking allegations seriously. There is nothing inherently problematic about saying so. Difficulties arise when public statements appear to prejudge disputed facts or suggest that the investigation has become little more than a formality. That risk is easy to underestimate. The audience for a press release is today’s public. The audience for that same press release two years later may be a judge deciding whether the employer acted fairly. Statements that seem measured during the first news cycle can read very differently when placed beside deposition testimony or investigative records.
The Governing Standard: Reasonableness
The Shannon Sharpe matter is a reminder that employment decisions involving prominent individuals rarely occur in a vacuum. They unfold under public scrutiny, with incomplete information and competing pressures from employees, business partners, customers, and the media. Few employers will ever face that level of attention. Many, however, will confront the same legal questions:
- Should the employee remain at work while the investigation proceeds?
- Should the organization issue a public statement?
- What contractual rights exist to suspend or terminate employment?
- How much evidence is enough before taking action?
There are no universal answers to those questions. The right response depends on the facts, the organization’s policies, the governing contract, and the nature of the employee’s role. There is, however, one principle that consistently emerges from these disputes. Courts generally do not expect employers to know everything. They do expect employers to act reasonably. Reasonableness requires more than reaching the correct outcome. It requires a process that demonstrates thoughtful decision-making, consistent application of policy, careful documentation, and a willingness to separate allegations from conclusions until the available evidence justifies crossing that line. Employers often assume that litigation will focus on whether they made the right decision. In reality, the first question is usually much simpler: How did the employer reach it? That answer is often more important than the decision itself.
To discuss further, contact KJK Labor & Employment attorney J. David Campbell (JDC@kjk.com).