Privileged Until It Isn’t: Protecting the Investigation File and the Waiver Trap in Your Best Defense
What Employers Need to Know
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What does privilege cover in an investigation?
The attorney-client privilege protects confidential communications between client and counsel for the purpose of seeking or providing legal advice. It does not protect underlying facts. A witness who saw the incident can be deposed about what they saw regardless of whom they told. Facts are not privileged even when the person conducting the investigation to discover those facts has a law degree. But what about work product? Work-product protection adds a second layer for materials prepared in anticipation of litigation, but an investigation initiated as routine compliance, before litigation was reasonably anticipated, will struggle to claim it.
The Faragher/Ellerth trap
In harassment litigation, the employer’s most important affirmative defense, enunciated in the Supreme Court’s Faragher/Ellerth case, turns on proving that the employer exercised reasonable care to prevent and promptly correct the conduct. The evidence of that reasonable care is, almost always, the investigation. The moment you plead that defense and point to your investigation’s adequacy; you have put the investigation at issue. Courts routinely hold that you cannot simultaneously wield the investigation as a sword and shield its contents as privileged. The file and the notes about the investigation become discoverable. Employers who ran their investigation assuming permanent confidentiality then face a tough choice. Should they waive and produce, or abandon the defense?
When should you consider the impact of privilege on the investigation?
The escape from the trap is not clever labeling; it is a decision made at intake. Some investigations are built to be shown. The likely defense exhibit, conducted by HR or an independent third party, documented in the knowledge that a jury may one day read page by page. For these, privilege is not the goal. The goal is quality and counsel’s role stays advisory and separate. Other investigations are built to stay privileged. Investigations that involve counsel-led inquiries into legal exposure, where the deliverable is legal advice and the company accepts that it will not be able to parade the investigation as its defense. Both are legitimate. What fails is the hybrid conducted by accident: a lawyer-run investigation the company later wants to use as its Faragher/Ellerth showing, discovering only in motion practice that it must choose between its defense and its privilege. Decide first. Paper the decision in the engagement and the file. Then conduct the investigation accordingly.
What can employers do now to evaluate privilege and its impact on its ideal processes?
- Add a privilege decision to your intake protocol. Before the first interview ever happens, the business should decide whether it wants to shield or show the investigation file.
- Discipline your labeling. “Privileged and confidential” stamped on documents that are neither does not create protection and actively undermines your credibility when challenged.
- Keep two streams where counsel is involved. Investigative facts in one file, legal advice in another. Mixed documents are how waiver of the privilege spreads.
- Control distribution ruthlessly. Privilege survives only with confidentiality. A report forwarded across the management team may have lost its protection without anyone noticing.
- Before asserting any defense that relies on your investigation, understand exactly what that assertion will make discoverable. Do it before the answer is filed, not after.
Next installment: What is the ideal investigation plan? Considerations as to scope, litigation holds, and the interim measures that protect people without prejudging the outcome. To read the previous installment, click here.
