Finding the Facts - Disciplinary and Harassment Investigation

In Wellpoint Health Networks, Inc. v. Superior Court , 68 an employee complained that he was subjected to racial discrimination. A law firm conducted an investigation of the allegations. During subsequent litigation, the court held that if an employer defends a lawsuit by claiming that it conducted a thorough investigation and took an appropriate corrective action, “it does so with the understanding that the attorney-client privilege and the work product doctrine are thereby waived.” 69 However, this was a situation where the employer put the investigation at issue by setting forth a defense that a proper investigation was conducted. The court in Wellpoint did note that by retaining an attorney to conduct an investigation, an employer establishes a prima facie claim of attorney-client privilege. 70 In Petaluma v. Superior Court of Sonoma County , 71 the City retained an outside attorney to perform an investigation to assist the City in determining how to respond to an EEOC complaint and anticipated lawsuit, a legal service. The attorney was not only gathering facts; she was instructed to use her legal expertise to identify pertinent facts and come to a conclusion as to what happened. Plaintiff, on the other hand, was not able to present relevant evidence to contradict the City's assertion that the investigation materials were privileged. As a result, the Court determined that both the attorney-client privilege and work product doctrine applied. The court of appeal held that an employer does not waive privilege associated with an investigation conducted after the employee leaves employment simply by asserting the avoidable consequences defense. The Court determined that asserting the avoidable consequences doctrine may put the adequacy of an investigation into issue if the person was still employed and able to take advantage of an employer's corrective measures. However, a post-employment investigation would not be directly at issue since the employee could not take advantage of corrective measures. The City did not and could not attempt to rely on the investigation itself as a defense. Accordingly, if the employee had not quit and the employer was relying on the report in its defense, the privilege would likely not apply. E. U SING AN A TTORNEY TO D IRECT A T HIRD P ARTY I NVESTIGATION When an attorney directs a third party to investigate, and takes no part in the fact finding, the attorney work-product doctrine may prevent disclosure of the investigator’s notes, reports, and other information gathered during the investigation. 72 However, as noted above, it may be necessary to subsequently disclose the investigation report to support discipline, establish that a fair and thorough investigation was conducted. In fact, if a complainant files a charge and/or lawsuit for alleged violations of harassment, discrimination and/or retaliation laws, the investigator may be compelled to disclose the details of the investigative process, his/her notes, report, etc.. The attorney should direct the investigator to gather facts, make any needed credibility determinations, prepare factual findings and issue a report (which will likely be discoverable). Then, the district attorney can conduct a legal analysis and develop conclusions about harassment, potential liability, and similar legal issues. As long as the attorney does not participate in the fact finding functions, the attorney’s legal analysis is privileged. 73

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