When Allegations Arise: How to Handle Allegations of Sexual Misconduct in Nonprofit Organizations

For nonprofit organizations, associations, and foundations, an allegation of sexual misconduct against an employee is one of the most serious crises they can face. The responsibility is immense, especially when working with vulnerable individuals. Swift action is required, but hasty decisions can have catastrophic consequences. Professional crisis management and seamless compliance are essential to clarify the facts, protect all parties involved, and safeguard the organization’s reputation.

An anonymized real-world case study

At an educational institution, a staff member is accused by a child in their care of serious sexual assault. The administration—correctly—immediately suspends the employee to ensure an unimpeded investigation. However, rather than jumping to conclusions, a professional internal investigation is launched. This reveals a complex picture:

• Contradictory statements: The complainant's account contains internal contradictions.
• Exculpatory evidence: Witness testimony and objective facts (e.g., areas of responsibility, structural conditions) refute key allegations.
• Possible motive: Conflicts between the defendant and the complainant existed even before the allegations were made.
• Lack of evidence: There is no objective evidence or independent witnesses to support the alleged misconduct.

The Risks of Dismissal on Suspicion: Why Acting Prematurely Harms Organizations

The urge to terminate an employee based on suspicion in order to quickly resolve the crisis is understandable—but highly risky. A termination based solely on suspicion faces significant hurdles in German labor courts:

1. Strong suspicion: A strong suspicion is required for a dismissal based on suspicion to be valid. Mere initial suspicion or vague assumptions are not sufficient.
2. Full duty to investigate: The employer must prove that it has taken all reasonable steps to clarify the facts of the matter. A professional internal investigation is the only sure way to do this.
3. Hearing of the accused: The employee must be provided with a detailed account of the facts and given sufficient opportunity to respond.
4. Comprehensive balancing of interests: It must be demonstrably unreasonable for the organization to continue the employment relationship.

In this case study, a dismissal based on suspicion would have failed. The initial suspicion was disproved by the internal investigation. The consequences of losing a wrongful termination lawsuit would be severe: back pay, an obligation to continue employment, and massive, public damage to the company’s reputation.

The Safe Approach: A Professional Internal Audit as the Solution

A professionally conducted internal investigation and professional legal representation during the concurrent criminal investigation (in this case, the request for access to case files on behalf of the organization) are the only legally sound way to objectively clarify the facts. This protects the organization from making the wrong decisions and enables a fair, sustainable solution.

In the case study, the results of the investigation and the exchange of information with the investigative authorities led to the employee’s reinstatement. Accompanying organizational measures (e.g., reassignment to a different department, the dual-control principle) ensured that the presumption of innocence was upheld and that the protection of all persons in the employee’s care was guaranteed at all times.

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