In the January 20, 2022 edition of The Legal Intelligencer, Edward T. Kang of Kang Haggerty co-authored “Internal Investigations in the NFL: Lessons for Organizations Large and Small.”

Daniel Snyder, the embattled owner of the Washington Football Team, has been in the news again recently for all the wrong reasons. No stranger to scandal, Snyder has now been accused of interfering with the 2021 investigation into the workplace environment of his organization. This is just another in a long list of controversies Snyder has found himself embroiled in, which include suing financially distressed season ticket holders during the Great Recession, banning fans from bringing signs to FedEx Field, and rebranding his franchise after its former namesake was retired. This, coupled with Washington’s lack of success during his tenure, has led some to label him the worst owner in all of professional sports.

The Washington Post interviewed me in July 2020 to get my take on “inherent question looms over the Washington NFL team’s investigation of its workplace culture: If owner Daniel Snyder is paying the law firm tasked with inspecting his franchise, how can the ensuing report be considered independent, as Snyder insists it will be?” Just last month, the Post reported Snyder used a bribe, intimidation and private investigators to thwart a probe into allegations of Washington Football Team workplace misconduct, Congress demanded answers from the NFL. I’ve addressed the subject matter in this civil litigation column twice before—in “When to Hire Outside Lawyers to Conduct an Internal Investigation” in November 2019 and revisiting the subject in April 2020. The recent report from the Post is a reminder that an internal investigation is more relevant now than ever.

Despite its past and present controversies, the Washington Football Team remains an incredibly valuable asset, with Forbes estimating it to be worth $3.5 billion in their most recent annual ranking of the world’s sports franchises. This is an appreciation of over $2.5 billion since Snyder bought the team in 1999, despite Washington’s mere two playoff wins in that same timespan. As an owner in one of the most high-profile sports leagues in the world, the recent accusations against Snyder have attracted considerable attention and comment. For practitioners, these Snyder events provide helpful tips relating to how organizations both large and small should conduct internal investigations.

The original allegations about the workplace environment of the Washington Football Team are too numerous and salacious to cover in this column. Suffice it to say that these accusations detail a culture of rampant misogyny which, at its most innocuous would be considered sexual harassment, and at its worst may rise to the level of criminal acts. To thoroughly investigate these allegations, the team hired Beth Wilkinson, a veteran litigator whose impressive resume ranges from the prosecution of the Oklahoma City bombers to lead outside counsel for the FTC’s investigation into Google. In doing so, the organization cleared the axiomatic first step of any legal inquiry: hire competent counsel. The NFL would later assume oversight of this probe in August 2020.

Wilkinson, an outside attorney with no past involvement in this matter, also possessed another critical characteristic for this type of investigation: independence. Too often when organizations find themselves in need of an internal investigation, they assume that this means they should rely on an investigator from the organization. But this is a pitfall that should be avoided, as internal personnel are likely to have conflicts of interest or predispositions of the parties and circumstances involved. Further, an internal investigator reporting to higher level executives implicates obvious power dynamic concerns. One can imagine the reticence a Washington Football Team employee might feel presenting a report critical of the organization to Snyder, a man famous for suing journalists who do just that.

To prevent such concerns, organizations should deemphasize the “internal” aspect of internal investigations and hire outside counsel to conduct the review. This independence is critical, not just to the actual integrity of the investigation, but also to its perceived integrity. Even if an organization did have the resources, personnel, and protections in place to generate a truly independent report using one of its own employees, the results of this investigation would inevitably be subject to more scrutiny than if the review were conducted by an outside party. If the Washington Football Team had conducted its own review that ultimately cleared the organization of any wrongdoing, these finding would obviously be treated with intense skepticism.

But independence is more than just a prerequisite for a qualified investigator, it is a continuing obligation on the part of all individuals involved, and this is where Snyder and his agents have erred. As first reported by The Washington Post in mid-December, Snyder and his attorneys attempted to prevent Wilkinson from interviewing a woman who had accused him of sexual assault relating to an alleged 2009 incident on his private plane. This was the same incident that Snyder and his organization had settled a year earlier for $1.6 million, while not admitting any wrongdoing.

Naturally, in conducting her comprehensive review of the organization, Wilkinson sought to interview Snyder’s accuser. To prevent this, Snyder and his attorneys allegedly offered this woman additional money to maintain her silence. Beyond this, Snyder is said to have hired private investigators to intimidate potential witnesses, a charge which he and his attorneys deny. At least two members of Congress, Rep. Carolyn Maloney of New York and Rep. Raja Krishnamoorthi of Illinois, have now called on the NFL to turn over all evidence it has relating to this alleged obstruction of the investigation. This is not the first time Congress has taken an interest in the investigation, as the House Committee on Oversight and Reform had sent a letter before requesting information on the probe. Commissioner Roger Goodell has promised to cooperate with this request.

Wilkinson did reportedly end up interviewing Snyder’s accuser, but soon found herself on the receiving end of a lawsuit seeking to bar any disclosure relating to the 2009 allegation. The plaintiff in this suit was David Donovan, the team’s former general counsel, who claims he brought the suit to defend his own reputation as the overseer of the original investigation. Many, including Wilkinson herself in court filings, have speculated that Donovan only brought his suit at the behest of someone else as an attempt to hinder her investigation.

Wilkinson did eventually present her findings to the NFL, although a formal report was never released. Goodell held a press conference in July of last year where he announced that Snyder would be fined $10 million and have to temporarily step back from the day-to-day operations of the franchise, although no specific factual findings were disclosed. Many complained that the vague two-paragraph “summary of findings” released by the league was essentially a press release, and that the very serious allegations against Snyder and his franchise should have been resolved with more transparency. This is a common public relations dilemma faced by organizations conducting such reviews, but this fallout can be avoided or at least mitigated if the proper steps are taken in advance.

As with many aspects of public relations, managing expectations is key. Organizations should define deliverables early on, so that the public and stakeholders are not blindsided by the eventual result. Part of the backlash against the NFL stems from the public’s surprise at the laconic statement issued after such a lengthy and detailed investigation. If the league had communicated more effectively early on that Wilkinson’s eventual findings would remain confidential, and given convincing reasons about it, it is likely that the backlash would be less severe.

Relatedly, the NFL could have done a much better job at explaining why the report needed to remain confidential, and likewise should have communicated this as early as possible. Total transparency is not always desirable, and there are sometimes good reasons to keep certain aspects of an investigation confidential. Often, certain witnesses may only agree to cooperate if their identity and testimony is not made public. Especially when dealing with sensitive issues like sexual harassment or potential criminal exposure, individuals with relevant information may not be willing to share their knowledge if they know that it will eventually be publicized. Further, if this confidentiality is not kept, future investigations may be compromised when witnesses no longer believe an organization’s promises of such.

This was, of course, not the league’s first foray into such investigations, as former Carolina Panthers owner Jerry Richardson was forced to sell the team in 2018 after various workplace allegations were made against him. The NFL had largely followed the same playbook in that investigation, hiring competent counsel, conducting a thorough investigation, and fining Richardson a multi-million dollar sum. While the NFL’s public statement regarding that investigation’s findings were comparably terse, the public outcry was noticeable muted compared to current controversy surrounding the Washington Football Team. This is most likely because of one key difference in the outcomes of these investigations, namely, that Richardson is no longer an NFL owner.

While all organizations regardless of size will likely find themselves in need of an internal investigation from time-to-time, the frequency and scope of these investigations scales considerably as an organization grows. And while these investigations serve many purposes, such as avoiding litigation and disciplining wrongdoers, large organizations in particular should consider the public relations impact of such investigations.

The NFL’s investigation into Snyder and Richardson offer lessons for organizations of any size. First, organizations should hire a competent and independent investigator. Second, they should ensure that this independence is never compromised and that the investigation is allowed to proceed unimpeded. Third, they should set expectations as early as possible, especially when it comes to transparency. Finally, they should follow the recommendations of the investigator, both with respect to remedying prior transgressions and preventing future ones.

While the NFL faced considerable scrutiny surrounding its previous investigation into Richardson, this scrutiny largely focused on the allegations themselves, not the NFL’s handling of the probe. With the more recent investigation into Snyder, and the newfound allegations that he may have tampered with it, the public seems less likely to accept a brief press release and monetary sanctions. Without greater transparency regarding the findings of this probe, the public has no way to reconcile whether it believes the punishment levied is sufficient. It is laudable that the NFL has demonstrated that no one, not even NFL owners, is exempt from investigation. And, if the most recent allegations against Daniel Snyder are true, it seems almost certain that he will face the same fate as Jerry Richardson.

Edward T. Kang is the managing member of Kang Haggerty. He devotes the majority of his practice to business litigation and other litigation involving business entities. Contact him at ekang@kanghaggerty.com.

Kang Haggerty associate Ryan Kirk served as co-author of this article.

Reprinted with permission from the January 20, 2022 edition of “The Legal Intelligencer” © 2022 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.

In early November 2019, I wrote an article about the high-profile women who had called on Comcast to conduct an internal investigation regarding the alleged widespread culture of sexual harassment within the company. I discussed this issue and the rising calls for internal investigations within many industries and companies and their importance.

Since that article was published, Comcast has not been able to leave the spotlight on this issue. If anything, the calls for an internal investigation have only grown stronger. For example, four Democratic presidential candidates (Cory Booker, Kamala Harris, Bernie Sanders and Elizabeth Warren) called on the Democratic National Committee to make a formal demand on Comcast to perform an investigation regarding sexual misconduct before the November debate which was hosted by Comcast-owed MSNBC. Also, in November, Comcast went before the U.S. Supreme Court in an appeal of a U.S. Court of Appeals for the Ninth Circuit decision permitting a $20 billion racial discrimination suit to proceed against the company. Though the Supreme Court has not yet ruled on the matter, you should keep an eye out for its decision in Comcast v. National Association of African American-Owned Media.

The call for an internal investigation, not unique in the wake of the #MeToo movement, is not simply confined to the media and entertainment industries—although we may know more about them due to the high profile of many of those involved.

Recently, a number of high-profile female journalists associated with NBC News called for its parent company, Comcast, to begin an internal investigation to address alleged sexual harassment within the news network’s workplace. As one of the country’s most successful corporations, Comcast, based here in Philadelphia, is faced with a need duplicated by many Fortune 500 companies—hiring outside counsel to investigate an internal matter.

Megyn Kelly and Gretchen Carlson, key figures in exposing the decades of misconduct by the late Roger Ailes, have been vocal in their support of the need for an internal investigation. In that case, Fox failed to address complaints aimed at the former chair and CEO of Fox News. The allegations detailed in Ronan Farrow’s current best seller, “Catch and Kill,” not only reveals the depth of the issues, but highlights the potential damage to the profile of a successful business. The letter signed by Kelly and Carlson reiterated claims of a “corporate culture of widespread sexual harassment and abuse.”

The call for an internal investigation, not unique in the wake of the #MeToo movement, is not simply confined to the media and entertainment industries—although we may know more about them due to the high profile of many of those involved. Harassment and other inappropriate behavior are present at many workplaces and in all types of industries. These sorts of problems are also present within the legal profession, as well. The current litigation concerning DLA Piper is just one example. Vanina Guerrero and a few other women came forward concerning the alleged misconduct of Louis Lehot, a co-managing partner of the firm’s Silicon Valley office. She alleged the firm did nothing about it despite her reporting the misconduct.  DLA Piper recently filed a response to Guerrero’s Equal Employment Opportunity Commission complaint, alleging that Guerrero instead orchestrated her relationship with Lehot to advance her career. This situation has escalated into a very heated and public one, which has also had effects on the reputation of DLA Piper.

The situations that warrant internal investigations include more than just misconduct relating to sexual harassment. There are many cases where financial misconduct, fraud or other unsavory business practices can be the subject of an internal investigation. An investigation in this kind of matter would be done by those experts focusing on business litigation or corporate governance. Rampant financial misconduct will degrade a company’s reputation in the business world and will discourage others from investing in or otherwise doing business with a company. Quelling this type of behavior is thus essential for a company’s finances and integrity to remain intact.

In re Caremark International Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996) left long-lasting implications in corporate law regarding internal controls and corporate governance. The shareholders of Caremark alleged that the directors breached their duty of care by failing to establish adequate control systems—a failing that allowed employees to violate the law. The court issued an opinion that described what plaintiffs must show to prove that directors breached their oversight duty, which is within their duty of loyalty. Caremark was recently cited with approval in Marchand v. Barnhill, 212 A.3d 805 (Del. 2019), which held that Blue Bell Creameries board of directors “failed to implement any system to monitor Blue Bell’s food safety performance or compliance.” Although varying situations, these cases show the duty of directors to maintain oversight and remedy situations, which are violations of the law. Internal investigations are precisely a method of doing just that.

A poorly conducted or opaque internal investigation, although perhaps smothering the issue at the moment, almost always is a ticking time bomb for a company. If an employee feels their complaints have been ignored—and especially if the behavior in question continues—a company is only setting themselves up for future troubles. The employee(s) in question may pursue a lawsuit or otherwise publicly speak out, which will hurt both a company’s finances as well as their reputation. The recent developments regarding NBC exemplify the ramifications of this. The company’s insistence on the validity of their former, internally conducted investigation in the light of continued allegations has only further damaged their status in the public’s eye.

So when does a company decide that a third-party investigator is needed as opposed to an internal one? One might assume that a company’s internal people, whether in management or human resources, would have a better understanding of the company’s dynamics and thus could provide a better-reasoned opinion about the situation at hand. At the same time, this proximity to the people involved in the matter is exactly what often causes problems. The people tasked with conducting the internal investigation may find people they like or dislike involved, coloring their impressions and judgments. They may feel pressure from certain parties, especially from those higher in rank, to put out a certain judgment, and that pressure may make them fear for the security of their job. This is especially the case if the issue involves many higher-ups within the company. They may also just not have the expertise needed to handle complex issues. These requirements are the same factors that may convince a company to hire an outside expert to investigate the matter at hand.

One might ask why, under all these circumstances, which would encourage a company to hire professional investigators, highly sensitive and potentially explosive situations are often handled by nonexperts or those who cannot be objective enough to come to a fair investigatory finding. The ethical and responsible line of action is often clouded by personal interests, internal corruption, and a short-sighted view of how events will develop in the future.

Take, for example, The New York City Employee’s Retirement System v. Page, a recent case filed in the Delaware Court of Chancery in April (case number 2019-0280). This derivative lawsuit, filed by four New York City pension funds (The New York City Employees’ Retirement System, The Teachers’ Retirement System of the City of New York, The New York City Fire Department Pension Fund and the New York City Board of Education Retirement System) alleged that Alphabet Inc.—the parent company of Google—allowed for a workplace environment filled with sexual harassment and misconduct to thrive. Instead of addressing numerous complaints, employees alleging harassment were often indirectly punished and saw the perpetrators receive no punishment.

More alarmingly, high-level perpetrators often received severance packages in the sums of millions instead of being fired for cause for their behavior. Behavior like this was subject to protests last year. Besides awarding perpetrators for misbehavior, the lawsuit also claimed that these compensatory packages were breaches of fiduciary duty. Instead of changing an internal problematic structure, the perpetrators are “removed” but with a reward or the whistleblowers also get a severance package that buys their silence. Removing the perpetrators or buying the whistleblowers’ silence would provide a temporary fix to the permanent problem. Consequently, it does nothing to resolve the root of the problem—further exposing a company to even more costs when someone decides their problems should be addressed in a court of law.

For major companies like Google, it might initially seem that throwing money at a problem until it disappears could be a viable option. But, that is short-sighted, especially when considering the costs associated with a loss of the public’s faith and trust. A company’s survival ultimately depends on the public’s use of their product or services, and thus retaining a good reputation is vital. Recent events, as evidenced by Uber, Fox News and NBC, have also only proven that no company or person is too big or has too much money, to be immune from these problems.These image problems can discourage people from not only using a company’s goods and services but also become a hindrance to hiring employees. Especially for potential employees who come from underrepresented backgrounds, a company with a background of unaddressed sexism, racism or other forms of discrimination will not be an enticing place to work. This is also true for young people in general, who highly value equality and fairness in the workplace.

What all these situations have shown is how much things could have been different if the company retained an outside investigator to conduct an internal investigation. Many of these situations have only festered in severity after allowing unallowable behavior to continue for too long, with “remedies” that only exacerbate existing issues and damage the workplace environment. The number of people subject to harm—whether that was due to discrimination or to financially fraudulent behavior—could have been reduced. Damages to a company’s finances and its reputation could have been minimized. It is often tempting to not turn to an outside party, because it admits you have a problem, especially for public companies who have reporting requirements with the SEC. At the same time, addressing a major problem sooner rather than later would likely ensure less damage. Very rarely do matters such as these simply blow over.

Overall, the value of an internal investigation cannot be understated. Hiring dedicated professionals who can work with the expertise, objectivity, and diligence needed to handle a problematic situation will pay off tenfold in not only helping address the problem early on but also potentially avoiding bigger and more public lawsuits. Some small internal problems can be resolved internally. But for matters that are more complex and sensitive, turning to outside professionals will be a far more effective use of resources and will help avoid bigger problems down the line.