JPMorgan scandal a reminder that allegations are not facts, social media critics are not juries

The JPMorgan scandal involving allegations by a former senior vice-president, Chirayu Rana, against a former executive director, Lorna Hajdini, is now a tabloid spectacle: lurid accusations, denials, leaked details, lawsuits launched, withdrawn and refiled, and social media juries rendering verdicts in real time.

Beneath the sensationalism, however, lies an important issue for Canadian employers and employees alike.

Every day, allegations of workplace harassment, bullying, discrimination, retaliation and misconduct are made across this country. Few attract headlines. Yet for the individuals involved, the consequences are invariably devastating.

That is dangerous.

None of us yet know what truly happened at JPMorgan. Rana alleges Hajdini used her power over his compensation and job security to coerce him into a degrading sexual relationship. Hajdini categorically denied the allegations.

JPMorgan says it conducted an internal investigation and found the claims unsubstantiated, noting that Rana declined to participate in the process. Rana's lawsuit was withdrawn, then refiled with even more allegations.

The courts — not TikTok or LinkedIn — will ultimately determine the facts, if it ever gets to that. Often the damage is already done in the media and evident in the internal morale at the company, making any court decision anti-climactic and too late.

But the public reaction illustrates how quickly workplace allegations spiral out of control before any proper investigation occurs.

Employers today face immense pressure to react immediately whenever allegations arise. Many fear that caution will be interpreted as indifference or complicity. That fear leads to catastrophic mistakes.

Employers have a duty to take allegations seriously. If an employee reports harassment or misconduct, the employer must investigate.

But "taking it seriously" does not mean starting from the premise of guilt, suspending employees without evidence or launching a performative witch hunt designed to appease public opinion.

Nor does every complaint require an outside investigator and a six-month, quasi-criminal process. Few (if any) do, and such undertakings usually do far more harm than good to the organization, throwing it into chaos, with ungrounded suspicions all around. Few investigated employees ever return truly innocent.

The proper first step is usually a measured internal fact-finding exercise: interview the relevant individuals, preserve evidence, assess credibility and determine whether the allegations warrant a broader investigation. This should take two or three days. Employers who jump prematurely to conclusions expose themselves to enormous liability from both sides.

Dismiss a legitimate complaint without proper investigation and the complainant may sue for constructive dismissal, human rights damages or reprisal.

Conduct a reckless or biased investigation and the accused employee may sue for wrongful dismissal, aggravated damages or defamation.

And employers often underestimate the third category of risk entirely: false or exaggerated allegations.

Canadian law rightly protects employees who raise workplace concerns in good faith, even where they ultimately prove unfounded. Employees cannot lawfully be punished merely because an investigation failed to substantiate their complaint.

But that protection is not absolute.

An employee who deliberately fabricates allegations, falsifies evidence or knowingly makes malicious accusations may well have created cause for their own termination. In some cases, they may also face personal liability to the accused individual for reputational or economic harm.

The distinction between an unproven allegation and a knowingly false one matters enormously. Too often today, that distinction disappears in public discourse.

The same problem increasingly arises with self-described "whistleblowers."

Real whistleblowers perform an important public service. Canadian legislation protects employees who disclose legitimate wrongdoing in specific regulated contexts. But simply calling oneself a whistleblower does not create immunity from employment consequences.

We frequently see former employees threaten public allegations, regulatory complaints or reputational attacks — unless, of course, they receive compensation. Some complaints are entirely legitimate. Others are little more than leverage tactics wrapped in the language of moral crusading.

Threatening reputational destruction unless payment is made is not whistleblowing. In some circumstances, it may amount to criminal extortion.

Equally revealing is the timing of many workplace allegations.

In a striking number of cases, employees raise no complaint whatsoever during their tenure. The allegations emerge only after termination — often for the first time in a lawyer's demand letter seeking a substantial severance package.

That does not automatically mean the allegations are false. Employees may genuinely fear retaliation while employed. But employers and courts are entitled to carefully scrutinize credibility, timing, corroboration and motive.

The modern workplace has drifted into a dangerous binary mindset: either "believe everything immediately" or "dismiss everything entirely." Both are obviously wrong.

Due process is not a slogan reserved for criminal courts. It matters profoundly in workplaces, too.

Both the accuser and the accused deserve fairness. Both deserve to have allegations properly investigated. And both deserve decisions grounded in evidence rather than public pressure, corporate panic or social media outrage.

The lesson from the JPMorgan saga is not that allegations should be ignored. It is that allegations alone are not findings of fact.

Destroyed reputations are rarely rebuilt. Employers who fail to investigate properly can face ruinous liability. And the best investigators are usually people already working for you, who know the individuals involved, the company policies and culture, and who can move quickly, unlike outside investigators. Employees who weaponize false allegations can destroy lives as effectively as employers who ignore legitimate misconduct.

The obligation on everyone involved — employers, employees, lawyers, investigators and the media — is ultimately the same: Stick to the facts and respond in a calm, disciplined manner.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada. Jeffrey Vandespyker is an associate at Levitt LLP.