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Maintain Privacy of Workplace Investigations

Some Complaints Need Legal Investigation

Business owners in California have to deal with employees who complain about violations of their rights, harassment, discrimination, retaliation, complaints about break times and we’re just getting started. It’s tough enough for small businesses just to keep track of all the legal rules when it comes to their employees. Then, when an employee says that the business isn’t following the rules, the owner is not always sure what really happened.


Sometimes an employer might want to hire a third party to figure out what happened in order to fix the problem. It makes sense to hire an investigator to look into it and let you know what happened. But you may not want anyone else to see what the investigator found. In case there’s a lawsuit down the road, you want to keep your investigation secret. So the question is, how do you do so?

If A Lawyer Investigates It’s Private.

Why? Because the attorney-client privilege and attorney “work product” rule applies. Attorney-client privilege means that a court can’t ask you for certain things you and your lawyer tell each other. Attorney work product is the lawyer’s thinking and selection of facts that make up the report. Both are protected under the law. And this is critically important because if you’re investigating an employee’s complaint, you want to figure out what happened, but you don’t want to create a report that an employee can use as evidence against you.

It might not even occur to you that maybe something your lawyer gives you may not be part of the attorney-client privilege or their work product, but not everything your lawyer tells you is safe from showing up in court. Here, we’ll talk about some of the most important questions to ask if you want to figure out whether your investigation is protected from third parties.

  1. Is there an attorney-client relationship?

The first question seems simple, but it sometimes isn’t. In order for there to be an attorney-client privilege, you need to be your attorney’s client. The first thing this means is that the person investigating your complaint has to be a lawyer. If you have a private investigator who’s not a lawyer, or a human resources firm or some other non-lawyer investigator look into the complaint, then you won’t have an attorney-client privilege to protect the report that they produce.

Most of the time, if you hire a lawyer to work for you, you will sign an engagement agreement. This engagement agreement will often state flat out that you and your lawyer now have an attorney-client relationship. Sometimes initial consultations with a new lawyer will not fall under the attorney-client privilege if you don’t end up hiring the lawyer. But once you hire a lawyer to work for you, there should be an attorney-client relationship.

An example of how this works was the case of Waters v. City of Petaluma. In that lawsuit, the City of Petaluma got a complaint from one of their firefighters that she had been the victim of sexual harassment and discrimination. The City wanted to find out what had happened. They hired a lawyer who had a lot of experience with employment law investigations. They signed an engagement agreement with the lawyer. This agreement said that the lawyer would investigate the complaint and give the City a report. This agreement was one factor the court used to decide the attorney-client privilege protected the report.


  1. Did you and your lawyer believe that the communication was privileged?

The whole purpose of having an attorney-client privilege is so that you feel safe talking to your lawyer. So another factor courts look for is whether you and your lawyer thought your communications were private. Most lawyers will also have a line at the bottom of their emails and documents that they provide that says something like, “This communication is privileged and confidential.” These are some of the signs that you expected your messages to be privileged.

In Waters v. City of Petaluma, we can see how the court took this into account. In that case, the City signed an agreement with their lawyer that stated flat out that the report the lawyer would give them would be attorney-client privileged until the City waived the privilege or a court determined otherwise. The lawyer also took extra care to make sure no one saw the report except for the City decision makers. On every page of the investigation report that the lawyer gave to the City, there was a line saying that it was confidential and attorney-client privileged. So when the court was trying to decide whether the report was privileged, these things helped them decide that it was.


  1. Is the lawyer providing legal services or advice?

Under California law, an attorney-client privilege exists when a client hires a lawyer to provide “legal services or advice.” Because either one of these will be enough to protect an investigation from showing up as evidence in court, let’s look at legal services and legal advice separately, starting with legal advice.

Legal advice is a pretty simple idea to understand. If you talk to a lawyer and ask them what you should do about employment law, labor law, employee complaint or a possible employee lawsuit, then whatever they tell you will be legal advice. That is, legal advice is what a lawyer tells you to do about a legal problem or situation.

So what are legal services? Legal services covers a broad variety of different things that a lawyer can do. If a lawyer represents you in court, that’s a legal service, and only a lawyer can do it. Legal services might not include legal advice. Fact gathering, i.e. workplace investigation, without advice can be considered legal services.

This was a key issue in Waters v. City of Petaluma. In that case, the City wanted the lawyer to investigate the sexual harassment claim and tell the City what the lawyer thought had happened. But the City didn’t want the lawyer to decide what they should do about what happened. Instead, the City wanted their own lawyers to decide what to do.


Because the City was not looking for the attorney’s advice (what to do about what happened), the employee argued no “legal advice,” therefore no attorney-client privilege. Employee forgot the attorney-client privilege also applies to “legal services.” The Waters v. City of Petaluma Court ruled that the “rendering of legal advice is not required for the privilege to apply.” Providing “legal services” is enough. Because “fact finding” (what the lawyer thought happened) counts as “professional legal services,” the privilege applied.

  1. Is the privilege waived by assertion of the “avoidable consequences” defense?

This part is tricky. First, what is the avoidable consequences defense? Well, say one of your employees has a complaint (like an unlawful harassment complaint). Probably you have an employee handbook with a policy prohibiting unlawful harassment and laying out a procedure for making and handling of complaints.


Maybe you meet with the people involved. If you figure out that someone violated your company’s policies, you give your employees some more training, discipline them, or otherwise take steps to fix the problem. This could take care of the problem if the complaining employee participates in the process and works with you.


When employee doesn’t work with the employer, then employer has an “avoidable consequences” defense. Employee failed to take advantage of employer’s process and thus failed to avoid negative consequences that may result. The ultimate failure to cooperate is to complain and then quit without giving the employer the opportunity to respond.


What does the avoidable consequences defense have to do with the attorney-client privilege? We said before that if you hire a lawyer to investigate a complaint by an employee, that report will usually be privileged. But if you try to use the avoidable consequences defense, then you might waive this privilege.

This means that you give up the protection of attorney-client privilege when you use the investigation to prove that you were trying to respond to the employee’s complaint. But if the complaining employee quits before you can do the investigation, the investigation is still privileged, since it doesn’t really benefit the employee anymore.

This is a bit complicated, so let’s look at an example. We’ll return one last time to Waters v. City of Petaluma. In that case, the firefighter took a leave of absence. While on leave the firefighter filed a complaint with the Equal Employment Opportunity Commission (EEOC). Via the EEOC complaint, City learned for the first time firefighter felt she had been subjected to harassment and discrimination based on her sex.


Then just days after the City received the EEOC complaint, firefighter quit. In the Waters v. City of Petaluma case, the City asserted the “avoidable consequences” defense. City alleged the firefighter hadn’t taken advantage of the City’s process for dealing with sexual harassment complaints. If the firefighter had gone through the City’s process, she could have avoided having to quit.


The firefighter argued City waived the attorney-client privilege for the investigation and report because it put the investigation and report at issue by asserting the avoidable consequences defense.


The Court ruled the avoidable consequences defense “focuses upon what the employer and employee did or did not do while the employee was employed.” Since the investigation happened after the firefighter quit, it did not bear on what happened while the employee was employed. Thus, the Court allowed the City to keep its investigation report secret.


Key Take-Aways

  • Hire a lawyer to get privileged complaint investigations and investigation reports
  • Sign an engagement agreement
  • Make sure report states that it’s privileged
  • If lawyer makes legal judgments, it’s privileged
  • If investigation/report is needed to prove your defense to harassment, the privilege is waived

Get Legal Help

If your business has received an employment law or labor law complaint, get in touch with an experienced employment lawyer at Vision Law® today to get the help you need.