On November 13, 1997, a California Court of Appeal said that an employer who defends a harassment-type claim by relying on its investigation “cannot have it both ways” (Wellpoint). Courts still apply that rule. A defensible investigation is one the company would be comfortable showing a jury, because if the company relies on it, the employee’s lawyer will likely see the file, including material that would otherwise be privileged. It’s also often the employer’s best evidence that it took reasonable steps.
What does California law require an employer to do after a harassment complaint?
Act promptly and fix what the facts show. Government Code section 12940(j)(1) makes harassment by a coworker unlawful if the employer “knows or should have known of this conduct and fails to take immediate and appropriate corrective action,” and it adds that “An entity shall take all reasonable steps to prevent harassment from occurring.” Subdivision (k) makes it a separate unlawful practice “to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.”
The Civil Rights Council’s regulation at 2 CCR § 11023 turns that duty into specifics. It says “Employers have an affirmative duty to take reasonable steps to prevent and promptly correct discriminatory and harassing conduct.” The written policy every employer must distribute has to create a complaint process that provides “Impartial and timely investigations by qualified personnel” and “Documentation and tracking for reasonable progress.” It also has to say that the employer “will conduct a fair, timely, and thorough investigation that provides all parties appropriate due process and reaches reasonable conclusions based on the evidence collected.”
One limit helps employers. Under the same regulation, “There is no stand-alone, private cause of action under Government Code section 12940(k).” An employee has to win the underlying harassment, discrimination, or retaliation claim first.
How does the investigation get used in a lawsuit?
Mostly as the employer’s proof that it took reasonable steps. In State Department of Health Services v. Superior Court (2003) 31 Cal.4th 1026, the Supreme Court of California recognized an “avoidable consequences” defense to FEHA claims of hostile-environment sexual harassment by a supervisor. In the Supreme Court’s words, quoted in City of Petaluma v. Superior Court, the defense has three elements: “(1) the employer took reasonable steps to prevent and correct workplace sexual harassment; (2) the employee unreasonably failed to use the preventive and corrective measures that the employer provided; and (3) reasonable use of the employer’s procedures would have prevented at least some of the harm that the employee suffered.”
That defense reduces damages. It doesn’t defeat liability outright. Its first element also depends on the company’s response being reasonable, and in my view a slow, one-sided investigation is evidence for the employee on that element, not against.
The investigation matters in a second kind of case too: the one brought by the accused employee after discipline or termination. In Cotran v. Rollins Hudig Hall International, Inc. (1998) 17 Cal.4th 93, an implied-contract case about a termination for alleged harassment, the Supreme Court held, for employees who can be fired only for good cause, that the question for the jury was whether the employer, “acting in good faith and following an investigation that was appropriate under the circumstances, had reasonable grounds for believing plaintiff had done so.” It described good cause as a conclusion “supported by substantial evidence gathered through an adequate investigation that includes notice of the claimed misconduct and a chance for the employee to respond,” as the opinion puts it. One investigation often has to hold up against two opposite lawsuits.
Is a harassment investigation privileged?
It can be, and the case for privilege is strongest when a lawyer conducts it to provide legal services. In City of Petaluma v. Superior Court (2016) 248 Cal.App.4th 1023, the city hired an outside lawyer to investigate a former firefighter’s claims after she filed an EEOC charge and resigned. The First District held that “The dominant purpose of outside counsel’s factual investigation was to provide legal services to the employer in anticipation of litigation,” and that counsel “was not required to give legal advice as to what course of action to pursue in order for the attorney-client privilege to apply.” The investigative report was protected.
Wellpoint (1997) 59 Cal.App.4th 110 reached a similar conclusion about a law firm’s prelitigation investigation, holding that the record didn’t support the trial court’s ruling that the privilege and work product doctrine didn’t apply.
Privilege isn’t automatic, though. Both cases involved outside lawyers, and in Wellpoint the employee offered no evidence that the lawyer was doing routine personnel fact-finding instead of legal work. The same opinion noted that “documents prepared independently by a party, including witness statements, do not become privileged communications or work product merely because they are turned over to counsel.” I’d plan an internal investigation on the assumption that it will be produced.
When does relying on the investigation waive privilege?
When the employer puts its adequacy at issue. The Wellpoint court wrote: “If a defendant employer hopes to prevail by showing that it investigated an employee’s complaint and took action appropriate to the findings of the investigation, then it will have put the adequacy of the investigation directly at issue, and cannot stand on the attorney-client privilege or work product doctrine to preclude a thorough examination of its adequacy.” It continued, “The defendant cannot have it both ways.”
Wellpoint stated that rule but didn’t apply it. It held the waiver question depends on the claims and defenses pleaded (an answer or discovery responses can show the defense). Because no complaint or answer was on file, the order requiring production was premature, and the court sent the issue back for a later motion if the employer raised the investigation as a defense.
Petaluma drew the line further. The city asserted the avoidable consequences defense, but the investigation took place after the employee had left. The court held that “the assertion of an avoidable consequences defense does not put a post-employment investigation directly at issue in the litigation,” because the employee “necessarily could not have taken advantage of any corrective measures adopted in response to a post-employment investigation.”
My view on the practical lesson: decide early which investigation is the defense. If the company plans to rely on what it did while the employee was still working, that investigation should be done by someone the company is willing to put on the witness stand, with a file built to be read. Legal advice about what to do with the findings belongs in a separate channel with separate counsel. Mixing the two invites a waiver fight over everything.
What makes an investigation hold up?
| What the employee’s lawyer will attack | Related rule (policy content under 2 CCR § 11023(b)) | What answers it |
|---|---|---|
| The company waited too long to start | Gov. Code § 12940(j)(1); 2 CCR § 11023(b)(4)(B) | A dated intake record and a start date measured in days |
| The investigator was biased or untrained | 2 CCR § 11023(b)(4)(C) | An investigator outside the reporting chain, with training or experience on the file |
| The accused never got to respond | 2 CCR § 11023(b)(7); Cotran | A documented interview where the accused heard the allegations and answered them |
| The conclusion ignored the evidence | 2 CCR § 11023(b)(7) | A written report tying each finding to specific evidence, including credibility reasons |
| Nothing changed after the finding | Gov. Code § 12940(j)(1); 2 CCR § 11023(b)(9) | A record of the remedial steps actually taken and follow-up with the complainant |
| The complainant was punished for complaining | 2 CCR § 11023(b)(10) | Proof that no adverse action followed, or a documented legitimate reason for any that did |
The confidentiality promise matters as well. The policy must state that confidentiality “will be kept by the employer to the extent possible, but not indicate that the investigation will be completely confidential,” under section 11023(b)(8). An investigator who promises total secrecy has made the promise the regulation says the policy should not make.
What should a company do when a harassment complaint becomes a claim?
Once a demand letter, CRD complaint, or lawsuit arrives, the investigation file is evidence. Handle it that way:
- Preserve the complaint, the investigation file, interview notes and recordings, emails and texts among the people involved, and every version of the harassment policy and training records in effect.
- Calendar the response deadline on the summons or CRD complaint, and check for an arbitration agreement and an employment practices liability (EPLI) policy with notice terms.
- Identify who investigated, who decided the outcome, and who knew about the complaint and when, and make sure no one takes action against the complainant or witnesses that could look like retaliation.
- Separate what was done by HR or an outside investigator from any legal advice the company received, and keep a log of what is claimed as privileged and why.
- Talk to a lawyer before producing the investigation file, before deciding whether to rely on the investigation as a defense, and before offering anything to settle.
The firm’s page on employer defense in California employment cases describes how harassment and retaliation claims are evaluated from the first complaint forward.
Harassment investigation questions from California employers
Should an outside lawyer conduct the investigation?
It depends on what the company wants the investigation to do. Petaluma shows that an outside lawyer’s fact investigation can be privileged. Wellpoint shows the company may lose that protection if it later relies on the investigation as its defense. One approach I’d consider is one outside investigator for the fact-finding and different counsel for legal advice, so that relying on the investigation doesn’t open the advice too.
Do we have to tell the accused employee the allegations?
The harassment policy must promise “appropriate due process” for all parties under 2 CCR § 11023(b)(7), and for employees who can be fired only for good cause, Cotran tied a defensible termination to notice of the claimed misconduct and a chance to respond. In practice, the accused should hear the substance of the allegations and have a real chance to answer them before the company reaches a conclusion. Protecting the complainant’s identity where possible is consistent with that.
Can an employee sue just because our investigation was poor?
Not on that ground alone. The regulation says there is no stand-alone private claim (the CRD itself can seek non-monetary remedies) for failing to prevent harassment under section 12940(k), so the employee has to prove the underlying harassment, discrimination, or retaliation. But a poor investigation is strong evidence on those claims, and it can defeat the avoidable consequences defense.
Does an investigation after the employee quits help the defense?
Usually not for avoidable consequences. Petaluma explained that a post-employment investigation can’t show the employee failed to use corrective measures, because those measures came too late to use. It also can’t show the employer took reasonable steps while the employee was working. Petaluma held such an investigation stayed privileged when the employer didn’t rely on it.
If a former employee says HR ignored a harassment complaint
If your company has been sued or named in a CRD complaint by an employee who says the company failed to investigate or act on a harassment complaint, the investigation file usually decides how strong the claim is. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving workplace harassment and failure to prevent harassment. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statute is Government Code section 12940, subdivisions (j) and (k). The regulation is 2 CCR § 11023. The opinions are Wellpoint Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, City of Petaluma v. Superior Court (2016) 248 Cal.App.4th 1023, and Cotran v. Rollins Hudig Hall International, Inc. (1998) 17 Cal.4th 93.
This post is general information about California and federal employment law as of November 5, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.