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Undercover operatives and the crux of credibility.

Undercover Operatives and the Crux of Credibility

IN THE AUGUST 1986 ISSUE of Security Management I discussed discharging an employee who dealt drugs off employer property and during nonworking hours. When such an employee was represented by a union and the discharge was appealed to arbitration, the union frequently obtained an arbitral reversal of discharge. The assumption was that the discharge would be easier to sustain if the offense occurred at the workingplace, where the job-relatedness of the activity would be self-evident.

In the intervening three years, numerous cases have convinced me this assumption was largely incorrect. It is nearly as difficult to sustain a discharge when the activity is on-site as when it is off-site.

The most vexing problem is obtaining adequate proof. Most often proof is obtained through some sort of security management-run undercover activity. These cases often boil down to the undercover operative's word versus the grievant's denials that illicit activity took place.

The security department that attmepts undercover activity faces numerous pitfalls involving operative credibility, corroborative evidence, police involvement, and procedural matters of due process. Long-term effects must also be considered. Although this discussion focuses on undercover investigation to combat drug sales, the pitfalls discussed apply equally to the investigation of drug or alcohol use, theft, gambling, or any other illicit on-the-job activity an employer wishes to eradicate.

THE IDEAL UNDERCOVER witness in arbitration presents the convincing demeanor of one who is professionally trained, experienced in public law enforcement, competent, and personally disinterested.

The least desirable undercover witness is a person with a criminal background. Such a person might be able to penetrate a criminal network easily. However, this supposed advantage is outweighed by the fact that such a person generally is worthless as a credible arbitral witness.(1)

Credibility involves much more than an impressive resume to be recited for the record. When corroborative evidence is scanty or absent altogether, the undercover operative is at a disadvantage due to the burden of proof. With the presumption of innocence, uncertainty as to what transpired favors the grievant. Only if the undercover operative's testimony is substantially more credible than the grievant's will a case be winnable.

Some aids help convince arbitrators of operative credibility. For example, credibility is achieved more easily when the operative or his or her firm was recommended to the employer by the police or when the operation in some way has been handled in cooperation with law enforcement.(2)

One innovative attempt at credibility enhancement was tried in a case involving the word of the operative against that of several grievants. The operative took and passed a lie detector test that the grievants refused to take. While the refusal was not held against them, the arbitrator attached significant weight to the operative's passing, and the grievants' discharges were upheld.(3)

While the lie detector method has been too rarely tried to tell if it would be generally helpful, it is certainly worth a try in a similar situation. If it is tried, the polygraph operator and his or her records of the test should be available at the hearing for cross-examination.(4)

Any operative behavior during the undercover operation that lessens the operative's appearance of competence can be devastating. For example, in one case the operative failed to preserve a small sample of drugs sold even though the agent was only the middleman of a multiple transaction.(5) The arbitrator, convinced by the union that ample opportunity had existed for the preservation of a small sample, found this failure called into question the operative's total credibility and ultimately reinstated the grievant.

Personal involvement or bias by the operative can be similarly damaging. Any ongoing personal animosity by the operative toward a grievant would damage credibility. However, it would have to be proven, not simply claimed, by the union or grievant.

Problems can arise when the operative is given specific directions. It is best if the operative is simply placed into the environment without a list of particular suspects. Similarly, the operative should never become so involved that entrapment can be shown. If it can be shown in any way that the operative acted as a provocateur, the case will almost certainly be lost.(6)

Also, the investigator must have no stake in the outcome of the arbitration process. In an unpublished arbitration case, a union learned and disclosed in a hearing that an undercover operative evidently liked the company so much he applied for a security management position with another branch of the firm following his investigation. As his hiring prospects undoubtedly would have been enhanced by a successful arbitral outcome, the arbitrator viewed his testimony skeptically. The company not only lost the case but also felt it necessary to rescind several other discharges resulting from the investigation. The entire investigation was scuttled.

During undercover operations it is important that the operative's observations be carefully and accurately recorded in personally written daily reports.(7) The manager who makes disciplinary decisions after the investigation should examine these raw reports rather than summaries by someone other than the operative.

This procedure can prevent embarrassment to management later during arbitration of a case. For example, in one case an undercover security investigator was hired by an airline to isolate a source of theft. The investigator reported to his detective agency supervisor that he had observed a maintenance employee take something from a plane's galley and place it in his toolbox. He reported further that he later found an opaque, sealed bag in one of the maintenance toolboxes. From the outside, the bag's contents felt like silverware.

After this information filtered upward through the agency, the agency head reported to airline management that the operative had observed airline silverware through a clear plastic bag, which was then opened and examined. The agency head also reported the silverware came from a particular employee's toolbox. Based on this evidence, airline management fired the employee. It is easy to imagine management's extreme chagrin in the subsequent arbitration when its own prime witness, the undercover operative, had to dispute the essential points of the case.(8)

OBVIOUSLY, THE MORE HARD EVIdence that can be accumulated for presentation in arbitration, the more likely a case will be won. In some important ways, it is easier for an undercover investigator to prepare a case for employee discharge than it is for an undercover police officer to prepare a case for criminal conviction. The rules of evidence typically are more relaxed in an arbitration proceeding than in criminal court and evidentiary exclusion is uncommon. The arbitrator generally will accept evidence for what it is worth and note and consider any objections when examining it.

For example, questions might be raised concerning the chain of passage and control of evidence. Technical shortcomings that might exclude evidence in court merely reduce the importance attached to that evidence in arbitration and do not exclude it totally.

However, corroborative evidence should be just that--a supplement to and not a substitute for convincing direct operative testimony. Technology has its limitations. For example, a government employee suspected of selling LSD was placed under video surveillance. Fellow employees were periodically observed furtively slipping the employee money and receiving small packets in return. The employer charged that these packets contained LSD, a charge buttressed by the discovery of LSD hidden near the employee's workstation.

As part of her defense, the employee proved that on many occasions she had obtained state lottery and disco dance tickets for employees and that she frequently provided change for fellow employees. The arbitrator, unable to distinguish what sort of transaction took place on the video, reinstated the employee with back pay." If one of the customers had been an undercover operative and the LSD had been sold, the case would have been airtight instead of a bust gone bust.

In a similar overreliance on technology, tape-recorded admissions of criminal involvement made by employees to undercover operatives were held to be insufficient to support discharge. The grievants in the arbitration hearings testified the admissions were mere fabrications done to impress the operatives.(10)

AS WAS STATED EARLIER, THE greater the degree of police involvement with an undercover investigation, the more credible the accumulated evidence. Situations where the police place their own undercover officer and then release the results to the employer provide maximum credibility. When the operative was either recommended by the police or provided with technical assistance, credibility also is enhanced.

There is, however, a downside to such involvement. To begin with, due process considerations generally are activated when the police are directly involved. For example, more stringent limitations are placed on search activities. Evidence that would be acceptable in arbitration may well be disallowed in the courtroom because of the way police obtained it.(11) Also, there may be a considerable delay before the investigative results can be released to the employer.

The rationale for undertaking an operation without police involvement, support, or knowledge should be clearly defended before the arbitrator. This should be done because the union will certainly raise the point in arbitration. For example, in an unpublished case the arbitrator discounted the lack of police involvement or knowledge as a factor because an earlier company operation had been compromised by a leak in the local police department, and the company feared a repeat.

In yet another case, a company refused involvement in an area-wide police undercover investigation. It decided to investigate alone because an intolerable period of time would have elapsed before disciplinary action could be taken against the offenders. The arbitrator held this as reasonable.

The question arises as to whether a company, investigating on its own, should make the results of its investigation available to law enforcement authorities and bring charges against employees involved in alleged criminal activity. While it is tempting to avoid the hassle and simply discharge the offenders, the failure to refer the matter to the appropriate law enforcement agencies may come back to haunt a company. The union will certainly bring this up in arbitration and cite it as a tacit company admission that its case is weak.

In one such case, the arbitrator, impressed by this argument, ordered reinstatement with back pay for several alleged drug dealers. The arbitrator stated that if the company believed the report of the investigator, it was obligated to report the matter to law enforcement authorities.(12)

But what if the employer brings the information to law enforcement's attention and nothing happens? Can this be held to diminish the credibility of the employer's case?

In one case that a district attorney declined to prosecute, the arbitrator nevertheless upheld the discharge of an employee for selling cocaine and declared that the decision by the district attorney could not detract from the weight of the evidence in the case.(13) This also appears to be the typical arbitral response when charges are brought but then dismissed by the judiciary or else the defendant is found not guilty. Arbitrators have long felt that the industrial disciplinary process and the criminal justice system are totally separate and unrelated entities with differing requirements for findings of guilt or innocence.(14)

A MAJOR PROBLEM WITH AN ON-going undercover investigation is balancing the investigation's integrity and the operative's safety with the affected employees' rights to prompt discipline and early access to evidence against them, including the investigator's identity and findings.

Arbitrators usually understand this difficulty and tolerate delays in the disciplinary process when a bona fide purpose for the delays can be demonstrated and employee rights to an adequate defense do not suffer. Take, for example, a case where an ongoing, county-wide police undercover effort had produced evidence of employee drug use and selling. The arbitrator tolerated months of delay between the employee misconduct and the imposition of discipline because the company acted promptly when it was finally authorized by the police to use the information.(15)

In another case, a similar delay occurred. The union contract specifically called for employee notification of disciplinary action within five days after misconduct was discovered. The arbitrator, admitting that this procedure was violated, held that the delay was unavoidable and was insufficient reason to set aside the discipline.(16) However, in another case, the arbitrator did fault the company for delay and ordered reinstatement for the grievants but without back pay. This case was further complicated by the employer's refusal to allow the employees to respond to the charges before discipline was imposed.(17)

The best approach is to delay discipline until the investigation is safely completed and then to act promptly, allowing the employees affected and the union full access to all evidence. If the grievants can demonstrate that this inevitable delay has jeopardized their opportunity for a successful defense--for example, a crucial witness has died in the interim--there may still be trouble. However, this seems to be the least risky course of action.

Another problem in arbitration is the quantum of proof needed to support discipline or discharge. While arbitrators are virtually unanimous that discharge for criminal misconduct requires more than mere proof by a preponderance of the evidence, they are split as to whether the appropriate standard should be clear and convincing proof or the highest standard--proof beyond a reasonable doubt.

Those arbitrators supporting the highest standard generally note that discharge for criminal activity or moral turpitude can make further employment extremely difficult, in effect inflicting economic capital punishment. Those calling for the lesser standard point out that incarceration is not involved. An examination of published cases reveals a relatively even split in the arbitral community over this matter.(18)

Arbitrators are unlikely to alter their views on this issue lightly. If those views are known, they should be considered in arbitrator selection. If the arbitrator's position is unknown, the employer's representative should be prepared to argue forcefully that the grievant's rights are not the only relevant consideration in the decision.

Also to be considered is the employer's ethical and legal obligation to others, namely coworkers and the public, who could be harmed by ineffectively disciplined employees. Is management expected to act against, for example, toxic fumes only when their presence is established beyond a reasonable doubt? Of course not. Here mere suspicion of such a danger would create an obligation on the part of management to begin action.

Yet, the potential dangers of employee drug use and drug selling can be just as great in many employment situations. When these employer obligations are balanced against a grievant's right to fair treatment, a standard of clear and convincing proof appears to be quite reasonable. This is the argument to be pressed before the arbitrator.

AN UNDERCOVER INVESTIGATION should be undertaken only after full consideration of whether it might jeopardize the firm's long-term employee relations or labor relations plans. Undercover activities can profoundly affect employee morale and union relations.

While it is difficult to gain union sanction for or cooperation with an undercover effort, it is sometimes possible to do so if the effort is a part of a negotiated comprehensive drug abuse prevention and treatment program. If the union knows such an enforcement tool is absolutely necessary, knows the limits of the efforts, knows it is fairly run, and can gain treatment for employees with problems who come forth voluntarily, it may agree to cooperate with such a program.

At the very minimum, however, a unilaterally imposed undercover program should do nothing to antagonize the union unnecessarily. The program, in other words, should be more than just competent and fair. The undercover security function should especially resist any temptation to take advantage of chances to accumulate information on legal union activity. This not only would be the basis for unfair labor practice charges if discovered but also would absolutely destroy any positive union-employer relationship as well as ruin any arbitral credibility of the program for disciplinary purposes.

Whether or not employees are unionized, the employee morale implications of an undercover program must also be weighed carefully. In Alcohol, Drugs, and Arbitration, Robert Coulson, president of the American Arbitration Association, raised this issue in discussing the implications of a drug roundup at Lockheed Corporation following an undercover surveillance. Was Lockheed well served by embarking on an undercover operation? (Arbitrator) Kaufman's opinion does not give much guidance on that question, but one can imagine how employees who were accustomed to having an occasional beer or joint during their lunch break felt when crowds of police officers suddenly materialized, rounding up 50 employees and carting them off to the Burbank Jail. After that kind of treatment, what kind of loyalty toward Lockheed would remain? What happened to employee morale? Is this enlightened employee relations?(19)

There is no absolute answer, just costs of action as well as costs of inaction that must be weighed carefully before plunging in. (1)See Pacific Bell, 87 Bureau of National Affairs Labor Arbitration Reports (hereafter LA) 313 (1986). (2)See Kaiser Permanente, 77 LA 66 (1981). (3)Georgia Pacific, 85 LA 542 (1985) at 544. (4)See A.R.A. Manufacturing Co., 87 LA 182 (1986); Houston Lighting & Power Co., 87 LA 478 (1986); and Consumer Plastics Corp., 88 LA 208 (1987). (5)U.S. Borax & Chemical Corp., 84 LA 32 (1984). (6)See I.T.T. Continental Baking Co., 80 LA 377 (1983), and Inland Tool and Mfg. Inc., 65 LA 1203 (1975) at 1205. (7)See Kaiser Permanente at 69. (8)World Airways Inc., 78 LA 454 (1982). (9)United States Customs Service, 77 LA 1001 (1981). (10)Associated Grocers of Colorado Inc. (I), 81 LA 974 (1983), and Associated Grocers of Colorado Inc. (II), 82 LA 415 (1984). (11)See Kawneer Company Inc., 86 LA 297 (1985). (12)Pettibone Ohio Corp., 72 LA 1144 (1979) at 1149-1150. (13)Kaiser Permanente at 70. (14)See Certified Grocers of Illinois Inc., 281 American Arbitration Association Summary of Labor Arbitration Awards 9 (1982), and State University of New York, 74 LA 299 (1980) at 300. (15)Walker Manufacturing Co., 81 LA 1169 (1983). (16)Georgia Pacific. See also Zenith Electronics Corp., 90 LA 881 (1987), where an unavoidable six-month delay was tolerated in spite of limiting contractual requirements. (17)Associated Grocers of Colorado Inc. (II). See also Inland Tool and MFG Inc. (18)The following cases are illustrative: Associated Grocers of Colorado Inc. (I) and (II). General Telephone Co. of California, 73 LA 531 (1979). A.R.A. Manufacturing Co., 83 LA 580 (1984). Utility Trailer Mfg., 83 LA 680 (1984). Wayne State University, 87 LA 953 (1986). Safeway Stores Inc., 88 LA 1317 (1987). S. D. Warren Co., 89 LA 688 (1985). (19)Robert Coulson, Alcohol, Drugs, and Arbitration (New York: American Arbitration Association, 1987), p. 149.
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Author:Landis, Brook I.
Publication:Security Management
Date:Jun 1, 1989
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