Workplace Investigation Cannot Be Both Sword and Shield

Last week, the Portage County Court of Appeals issued an opinion addressing the confidentiality of workplace investigation notes, reports, recommendations and recordings of witness interviews when the employer’s attorney conducted the investigation and interviews.  Smith v. Technology House, Ltd., 2019-Ohio-2670.   The defendant employer had broadly asserted its Faragher/Ellerth affirmative defense of taking prompt remedial action, but had not specifically cited to its attorney’s investigation as the basis for that defense.  Nonetheless, the trial court found that the interview recordings, report and recommendations should be produced in discovery.  The Court of Appeals reversed in part on the grounds that the employer had not specifically waived attorney-client privilege or yet asserted that the investigation was the basis for its defense, but held that the recording of the plaintiff’s interview must be produced because she was clearly adverse to the employer at the time and had her own attorney.  It also ordered an in camera inspection of the investigation materials to determine what else may be outside privilege and work product protection because it predated the investigation, etc.  Finally, it noted that privilege may not be used as both a sword (i.e., defense) and shield (confidential). 


According to the Court’s opinion, the plaintiff alleged that she complained about sexual harassment.  The employer, fearing litigation, immediately retained counsel to conduct an investigation, which began the following day.  When the plaintiff was brought into a room with the company’s attorney, she left the room to contact her attorney and then informed the employer’s attorney that she was represented.  He still interviewed her, a few managers and a few hourly employees.  All of the interviews were apparently recorded.  When litigation commenced, the plaintiff sought during discovery a copy of the interview recordings of her and her non-supervisory co-workers as well as any notes and documents related to those interviews.  The employer responded that the information was protected by attorney-client privilege and the work product privilege.   The trial court granted the plaintiff’s motion, but the discovery order was broader than the request in that it ordered the production of all recordings and documents related to the investigation.  The defendant was also ordered to correct its discovery responses to identify the attorney who conducted the investigation.   The employer appealed the discovery order.


The employer pointed out that the Ohio Supreme Court has found workplace investigations by attorneys to be covered by the attorney-client privilege.   Therefore, the trial court’s broad order compelled the production of materials that were protected by privilege.   Nonetheless, the Court found that not everything related to the investigation was privileged.  “Documents and records whose existence preceded a factual investigation or were created independent of such investigation, i.e., independent of any communication between attorney and client, would not be protected by the attorney client privilege.”


“Also, the identity of persons who participated in the investigation is not covered by the privilege.”  Therefore, the attorney’s participation in the investigation is not confidential.

Further, the recording of the interview with the plaintiff was not protected by privilege because she was, by then, an adverse party with her own attorney.

Finally, the attorney-client privilege does not protect the recording of the interview with Smith as this interview may not properly be said to have occurred within the context of the attorney-client relationship.  In the case of a corporate client, Ohio cases have generally held that the privilege extends to communications between counsel and employees of the corporate client.  . . . In light of the foregoing, Technology House could not reasonably expect that the substance of the interview would have the character of a confidential communication between an attorney and client which underlies the reason for the privilege.  At the time of Smith’s interview, a de facto adversarial relationship existed between the parties and, therefore, the substance of that interview falls outside the scope of the privilege.

The Court also found that the attorney’s assessment and materials about the plaintiff’s interview would be protected as work product.   However, the application of privilege or work product to a particular document requires an analysis of the particular document and that was not possible on the current record because the employer failed to provide or produce a privilege log describing the documents being withheld as privileged and work product.

Upon remand, the trial court of necessity must either conduct an in camera review of the compelled discovery to determine whether the attorney-client privilege and work-product doctrine exempts them from discovery or require the production of description of the documents sufficient to make such a determination, noting that the following types of materials are not privileged: documents and records whose existence preceded Attorney Thompson’s factual investigation or were created independent of that investigation (supra at ¶ 24); the identity of persons who participated in the investigation (supra at ¶ 25); and any recordings or transcripts of the substance of the interview with [the plaintiff].

The Court also rejected the plaintiff’s assertion of waiver as premature on the current record.  The plaintiff argued that the employer’s assertion of its Faragher/Ellerth defense waived privilege and work product protection for the investigation. 

Although no Ohio court has adopted this position, it has been held in other jurisdictions that the assertion of the Faragher/Ellerth defense effects a waiver of any privilege attaching to a party’s investigation of the alleged harassment.  “When an employer puts the reasonableness of an internal investigation at issue by asserting the Faragher/Ellerth defense, the employer waives any privilege that might otherwise apply to documents concerning that investigation,” including “‘not only the [investigative] report itself, but [ ] all documents, witness interviews, notes and memoranda created as part of and in furtherance of the investigation.” . . . .

The issue of whether Technology House and Gear waived the privilege attaching to Attorney Thompson’s investigation by asserting a Faragher/Ellerth defense may be resolved by recourse to “[o]rdinary waiver principles” and the “animating maxim that the privilege cannot ‘be used as both sword and shield.’”  In re Itron, Inc., 883 F.3d 553, 558 (5th Cir.2018).  That is: “when a party entitled to claim the attorney-client privilege uses confidential information against his adversary (the sword), he implicitly waives its use protectively (the shield) under that privilege.”  (Citation omitted.)  Id.  

Accordingly, courts do not find a waiver of privilege unless a party indicates its reliance  on a particular investigation in its assertion of the Faragher/Ellerth defense.  The “clear majority view” is that the defense must be “premised, in whole * * * or [in] part, on the results of an * * * investigation.”  . .  . . “This holding aligns with the numerous cases across jurisdictions finding waiver ‘when a client asserts reliance on an attorney’s advice as an element of a claim or defense,’ * * * and the many dozens of cases finding no waiver when no such reliance has occurred.”

In the present case, Technology House and Gear’s assertion of the Faragher/Ellerth defense does not acknowledge the existence of much less indicate reliance upon Attorney Thompson’s investigation.  The mere assertion that they exercised “reasonable care to prevent and promptly correct any alleged sexually harassing behavior” does not constitute a waiver of any privilege applicable to the investigation.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB Suggests Employee Handbook Language Concerning Confidentiality of Workplace Investigation

Faithful readers may recall that last August, the NRLB found that an employer violated §7 of the NLRA by directing employee-witnesses to maintain the confidentiality of their interviews during the pendency of a workplace investigation.   Then, at the end of January, the NLRB issued an “Advice Memorandum” concerning Verso Paper which found that an employer’s employee handbook provision was unlawful under the NLRA, but suggested revisions which would bring it into compliance.  (Rumor has it that the Memorandum may have been issued in January, but was not published until recently).    The Memorandum was issued by the NLRB’s Division of Advice (which advises the Board’s regional offices about proceeding with administrative proceedings and whose opinion does not carry as much weight as a Board or court decision).  The Division found the last two sentences of the following employee handbook to be overbroad: 

 Verso has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up.

To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence. If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

The Division found this “blanket rule” did not demonstrate a particularized need for confidentiality on a case-by-case basis as required by the NLRB.   Accordingly, the Division recommended that the regional office proceed to issue a complaint against the employer unless the parties were able to settle the dispute.  Nonetheless, the Division also concluded that the employee handbook policy could be lawful if the employer revised it to replace the last two sentences with the following language:

Verso may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If Verso reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.  

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

NLRB Was Busy at End of 2012

In the last quarter of 2012, the NLRB issued several significant decisions which will affect both union and non-union employers in the future.  Three decisions in particular are worth noting.  In one, a non-union, non-profit employer was found to have violated the NLRA for discharging five employees for critical statements made on Facebook about a co-worker in violation of the employer’s zero-tolerance anti-bullying policy.  In another, the Board concluded that an employer is no longer always entitled to withhold from a union witness statements gathered during a workplace investigation that leads to the termination of an employee.  Finally, the Board held that employers with a newly certified union that have not yet reached a collective bargaining agreement generally may not unilaterally demote, suspend or discharge employees without first bargaining with the union.

Non-Union Employer Terminating Employees For Criticizing Co-Worker on Facebook.  In Hispanics United of Buffalo, the non-profit, non-union employer terminated five employees under the agency’s EEO non-retaliation/anti-harassment policy for criticizing a co-worker who was critical of their client service.   One of the terminated employees knew that the co-worker intended to express her concerns to the Executive Director and, while home on Saturday, asked her Facebook co-worker friends what they thought of this criticism.  Five off-duty employees responded by objecting to any criticism of their own performance.  The criticized co-worker also responded about the “lies” and reported to the Executive Director the following Monday that the Facebook postings had upset her enough to give her a heart attack.  Following an investigation – which included reviewing copies of the postings – five of the six employees involved were terminated under the agency’s “zero tolerance” for bullying and harassment under the EEO policy.  (The Director’s secretary was not discharged even though she also participated).   The Board’s majority found the Facebook criticisms of the co-worker constituted protected concerted activity and could not be the basis of disciplinary action.   The Board rejected the employer’s argument that the Facebook criticisms constituted bullying and harassment: “legitimate managerial concerns to prevent harassment do not justify policies that discourage the free exercise of Section 7 rights by subjecting employees to . . . discipline on the basis of the subjective reactions of others to their protected activity.”

Confidentiality of Written Witness Statements Collected During Workplace Investigations.  Since 1978, the NLRB has ruled that employers do not need to provide to a union witness statements gathered during a workplace investigation of employee misconduct (because the NLRB does not itself provide copies of witness statements prior to hearings).  However, on December 15, 2012, the NLRB overruled that decision in American Baptist Homes of the West d/b/a Piedmont Gardens.  The issues in American Baptist Homes concerned whether the employer “violated Section 8(a)(5) and (1) of the National Labor Relations Act by failing to provide the Union with the names, job titles, and/or written statements of three individuals who claimed that they witnessed” a nurse sleeping on duty that resulted in the nurse’s termination.  Two of the nurse witnesses submitted their written statements to HR with assurances of confidentiality, but the third nurse slipped her statement under the HR door with only the assumption of confidentiality without being asked for a statement or promised confidentiality.  The NLRB concluded that the employer “violated the Act by failing to provide the witnesses’ names and job titles.”  As for two the witness statements, the Board decided to overrule prior precedent, but to not apply retroactively it to employer in American Baptist Homes.  Nonetheless, because the third statement had been submitted spontaneously without any assurance of confidentiality, the employer was required to produce it to the union.

 Under the Board’s new test, “if the requested information is determined to be relevant, the party asserting the confidentiality defense has the burden of proving that a legitimate and substantial confidentiality interest exists, and that it outweighs the requesting party’s need for the information.” An employer “asserting the confidentiality defense may not simply refuse to furnish the requested information, but must raise its confidentiality concerns in a timely manner and seek an accommodation from the” union.  The Board majority rejected the dissent’s concern about the impact this would have on workplace investigations, particularly sexual harassment investigations governed by EEOC guidelines:  

The Detroit Edison balancing test is designed to take into account any legitimate and substantial confidentiality interest that an employer may have, which would include concerns about witness intimidation or compliance with EEOC guidelines. Where such concerns exist, the employer will not be required to provide the information, but will merely need to seek an accommodation from the union. It follows, then, that the Detroit Edison test encourages parties to a collective bargaining agreement to work together to accommodate their competing interests.

Duty to Bargain with Union Imposed on Employee Disciplinary Decisions.  In Alan Ritchey, Inc., the Board held for the first time that an employer which has not yet adopted a collective bargaining agreement with a union must first bargain with the union before imposing discretionary disciplinary actions on any employees in the bargaining unit.    The disciplinary actions at issue involved discretionary progressive disciplinary action for absenteeism, insubordination and threatening behavior.   Imposing disciplinary action was found to be a prohibited material unilateral change in the terms and conditions of employment. “[T]he employer has both a duty to maintain an existing policy governing terms and conditions of employment and a duty to bargain over discretionary applications of that policy.”

Disciplinary actions such as suspension, demotion, and discharge plainly have an inevitable and immediate impact on employees’ tenure, status, or earnings. Requiring bargaining before these sanctions are imposed is appropriate,  . . .  because of this impact on the employee and because of the harm caused to the union’s effectiveness as the employees’ representative if bargaining is postponed. Just as plainly, however, other actions that may nevertheless be referred to as discipline and that are rightly viewed as bargainable, such as oral and written warnings, have a lesser impact on employees, viewed as of the time when action is taken and assuming that they do not themselves automatically result in additional discipline based on an employer’s progressive disciplinary system. Bargaining over these lesser sanctions—which is required insofar as they have a “material, substantial, and significant impact” on terms and conditions of employment— may properly be deferred until after they are imposed.

The Board rejected concerns with the delay from a duty to bargain before imposing disciplinary action because the pre-imposition bargaining was only required for suspensions, demotions and discharges.  Moreover, “where the preimposition duty to bargain exists, the employer’s obligation is simply to provide the union with notice and an opportunity to bargain before discipline is imposed.  . . .  the employer is not required to bargain to agreement or impasse at this stage; rather, if the parties have not reached agreement, the duty to bargain continues after imposition.”  (emphasis added).  In addition, an employer could still act unilaterally where it “has a reasonable, good-faith belief that an employee’s continued presence on the job presents a serious, imminent danger to the employer’s business or personnel,” such as where “an employee has engaged in unlawful conduct, poses a significant risk of exposing the employer to legal liability for his conduct, or threatens safety, health, or security in or outside the workplace.” “Finally, an employer need not await an overall impasse in bargaining before imposing discipline, so long as it exercises its discretion within existing standards.”

Nonetheless, because this was a new Board policy, it decided to not apply the ruling retroactively to the employer, but to only apply it to disciplinary actions taken in the future.

Other Recent Board Decisions.  The Board also publicized its actions in a few other cases. In Latino Express , the Board decided to require employer to compensate employees for any extra taxes they have to pay as a result of receiving the backpay in a lump sum and to require employers paying back wages to file with the Social Security Administration a report allocating the back wages to the years in which they were or would have been earned. In Chicago Mathematics & Science Academy, the Board concluded that it had jurisdiction over an Illinois non-profit corporation that operates a public charter school in Chicago. In United Nurses & Allied Professionals (Kent Hospital) – The Board, addressed “several issues involving the rights of nonmember dues objectors under the Supreme Court’s Beck decision” and concluded that “ lobbying expenses are chargeable to objectors, to the extent that they are germane to collective bargaining, contract administration, or grievance adjustment.”  Finally, in WKYC-TV, Gannet Co. “the Board found that an employer’s obligation to collect union dues under a check-off agreement will continue after the contract expires and before a bargaining impasse occurs or a new contract is reached.”

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Supreme Court: Outside Attorney's Confidential Investigation Report is Exempt from Ohio's Public Records Law

Today, a per curiam Ohio Supreme Court dismissed a mandamus action brought by the Toledo Blade seeking the investigation report written by a private attorney on behalf of a governmental body on the grounds that the report was exempt from Ohio’s public records laws because of the attorney-client privilege. State ex rel. Toledo Blade Co. v. Toledo-Lucas Cty. Port Auth., Slip Opinion No. 2009-Ohio-1767. The report had been prepared after the Toledo mayor alleged that the port authority’s president was having an extramarital affair with the port authority’s chief outside lobbyist in violation of authority rules, etc. The port authority retained its outside law firm to conduct an investigation, which included reviewing documents and interviewing employees and other witnesses. The attorney prepared a report, which was distributed to each member of the authority’s board. “The board members were informed that the report was confidential and could not be shown or disclosed to any third party. Following a subsequent special session, copies of the report were returned to the law firm.” The authority then fired the president.

In response to the newspaper’s public records request, the authority provided copies of all documents reviewed by the attorney in the course of her investigation, but did not produce a copy of the report itself, claiming attorney-client privilege. According to the Court, “R.C. 149.43(A)(1)(v) excepts ‘[r]ecords the release of which is prohibited by state or federal law” from the definition of “public record.’ ‘The attorney-client privilege, which covers records of communications between attorneys and their government clients pertaining to the attorneys’ legal advice, is a state law prohibiting release of these records.’”

The Court rejected the newspaper’s argument “that the factual portions of the investigative report are not covered by the attorney-client privilege, because they do not constitute legal advice.” The common law attorney-client privilege “protects against any dissemination of information obtained in the confidential relationship. . . . In fact, most courts that have expressly addressed the issue of whether an attorney’s factual investigations are covered by the attorney-client privilege have determined that such investigations may be privileged. . . . For example, in Upjohn v. United States , 449 U.S. 383, 390-39, the United States Supreme Court recognized that the “first step in the resolution of any legal problem is ascertaining the factual background and sifting through facts with an eye to the legally relevant.” “[T]he Upjohn pronouncement hardly stands alone. Courts have consistently recognized that investigation may be an important part of an attorney’s legal services to a client.” The Court concluded that “the relevant question is not whether [an attorney] was retained to conduct an investigation, but rather, whether this investigation was ‘related to the rendition of legal services. . . . The attorney-client privilege “does not require the communication to contain purely legal analysis or advice to be privileged. Instead, if a communication between a lawyer and client would facilitate the rendition of legal services or advice, the communication is privileged.”

In short, “[t]he [attorney-client] privilege applies when legal advice of any kind is sought from the legal advisor in that capacity and the client’s confidential communication relates to that purpose.”

Before the attorney-client privilege applies to communications relating to investigative services, the client for whom the investigation was conducted must show that other legal advice or assistance was sought and that the investigation conducted was integral to that assistance.” After applying this test to the facts here, it is manifest that the factual investigation conducted by attorney Grigsby was incident to or related to any legal advice that the attorneys hired by the port authority would give concerning the mayor’s allegations of misconduct by the port authority president. More specifically, the attorney’s investigation required her to draw upon her legal training and experience as well as her knowledge of the law governing the port authority and its policies and personnel. Both the port authority and its outside counsel knew that the investigation was replete with various legal issues and consequences that would be better resolved by the port authority employing its long-time attorney to conduct the investigation and prepare the report. Legal issues included interpretation of Hartung’s employment contract, an analysis of ethics law and criminal law, potential tort claims by Hartung and Teigland, and the construction of a confidentiality provision in the settlement agreement concerning a previous port authority investigation. Legal analysis facts in the investigation is integrated throughout the report.

Insomniacs can read the full opinion at http://www.sconet.state.oh.us/rod/docs/pdf/0/2009/2009-ohio-1767.pdf

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.