A recent court case specifically explains that, when undertaking an audit in the workxplace, employers should give particular thought to the attorney-client privilage to prevent having to reveal sensitive details accidentally.
A Massachusetts federal magistrate judge ruled in Koss v. Palmer Water Dept. that the employer has waived the right of attorney-client because the outside lawyer knowingly handled the prosecution of a sexual assault lawsuit by another attorney. In the start of an inquiry, this should act as a warning to employers to consider the limitations of the attorney-client privilege before determining how to staff and handle the investigation, in order to reduce the possibility of having to reveal sensitive details.
Koss included an administrative assistant (the appellant, Ms. Koss) who alleged that the treasurer of her employer (the city) had exposed her to sexual harassment and a toxic work atmosphere. The complainant protested and later alleged that she appeared to be threatened by the treasurer and that the city refused to respond appropriately.
Subsequently, the city hired a lawyer to conduct an impartial investigation into the case of the petitioner. Although all the interviews were conducted by the prosecuting attorney, the city’s usual outside law firm had crucial role in leading, counseling, and directing the investigative attorney.
In state court, the complainant then filed a sexual harassment case, and the city’s regular legal firm represented the city in the action.
The defense of the city was, in part, based on the investigation undertaken by the investigating counsel. In fact, the city claimed the affirmative protection of Faragher-Ellerth, which requires an employer to escape vicarious responsibility for a toxic work environment supposedly created by the actions of a boss (as defined by the U.S. Supreme Court) if the employer can show that (1) the employer took fair diligence to discourage and immediately correct any harassing behavior, and (2) the employee unreasonably failed to take act in accordance with options provided by employer.
Eventually, the complainant sought to force the creation of records relating to the prosecution of the area. And the city claimed that, under the attorney-client privilege, records representing the role of the city’s regular law firm in the investigation were shielded from publication.
The judge ordered the city to submit investigation-related records concerning the city’s regular law firm after reviewing the documents at issue. The judge found that the regular law firm of the city was “part and parcel of the investigation” that formed the base of its affirmative defense of Faragher-Ellerth. Thus, the judge concluded that the city had waived the attorney-client privilege “for not only the [investigation] report itself, but for all documents, witness interviews, notes and memoranda created as part of and in furtherance of the investigation.”
In short, because lawyers at the regular law firm of the city “were closely linked to, if not controlling, the investigation,” and because the city raised the investigation as a defense to the allegations of the complainant, the judge ruled that the city had waived the right of attorney-client as to investigation-related records involving the regular law firm.
Under this context, the fundamental concepts related to the right of the attorney-client should be revisited not only to explain why the Koss judge drew this decision, but most specifically as a reminder to help employees escape similar pitfalls while performing their own inquiries in the workplace.
In general, the right of the attorney-client shields all messages from disclosure in which a lawyer and client meet confidentially for the intent of obtaining or offering legal advice.
In the other hand, if an attorney works in a non-legal capacity, for example, interviewing factual witnesses in an investigation, the right of attorney-client would certainly not extend. Id. Likewise, such conversations are often unlikely to be privileged where an in-house counsel offers corporate advice rather than legal advice.
In addition, the attorney-client protection can also be waived in a number of cases, such as exposure to third parties (inadvertent or not) or, as in the Koss case, where an employer provides a comprehensive investigation as an affirmative defense to the claims of a complainant. The contractor would almost definitely waive any presumption of confidentiality over the report and interview notes of the investigator by making such an affirmative defense, particularly though the investigator is an attorney.
Koss, however, goes beyond the simple waiver of attorney-client privilege as regards the documentation and interview notes of the prosecutor. Rather, Koss also represents the waiver of privilege in correspondence concerning the normal, external counsel of the city (in effect, its general counsel). The Koss decision could well have surprised and dismayed both the city and its regular law firm in this respect. They may well have concluded that outside counsel’s correspondence would be confidential without focusing on the particular limits of the attorney-client privilege.
Indeed, the correspondence of an employer with the outside counsel in general (and not including the prosecuting attorney) on how the employer might steer the investigation and/or respond to details obtained during the investigation will usually be covered by the right of the attorney-client. Specifically, so long as such messages are held private, require the providing of legal counsel, and do not spill over into the real operation of the inquiry, then the contractor should be entitled to cover those communications under the protection.
In Koss, messages from the city’s regular outside law firm to the investigating counsel were not covered by immunity. Given not only the requirements of the attorney-client privilege, but also the possibility that the city will need to reveal the specifics of its investigation to protect against the accusation of sexual assault (in spite of the declaration of the Faragher-Ellerth defense by the city), this does not come as a surprise. Of course, if this relaxation of the attorney-client privilege was expected by the city’s usual outside law firm, then there would be no surprise for them or the city, and therefore (presumably) no question.
In the other hand, if the city and the usual outside law firm expected all correspondence from the outside firm to be protected as privileged, then the transparency ordered by the court would certainly be genuinely detrimental.
In brief, in accordance with an investigation, the employer and the law firm serving as counsel should decide whether the law firm should (a) fully stop engaging the investigator, or (b) limit its correspondence with the investigator to I listening to (or receiving) the investigator’s report(s) and (ii) answering the investigator’s follow-up questions. Counsel does not provide legal advice to the investigator, and if the investigator is listening on the phone or waiting in the chair, counsel should not offer legal advice to his client. If counsel regulates their contacts with the investigator accordingly, so counsel does not report the legal guidance that counsel gave to their clients to the investigator.
Therefore, where an attorney completes a factual investigation that may be raised as a defense to a legal argument, the Koss decision implies the that attorney does not then serve as legal counsel. Similarly, the investigating attorney should not be interested in correspondence about legal advisory concerns between the contractor and its usual counsel.
In the end, Koss is a valuable warning of employers to consider the nature of the right of the attorney-client, and to take reasonable action in response to internal inquiries to prevent unintentional waivers of the privilege.
Before commencing an investigation into an employment allegation, an employer should pay particular attention to the attorney-client right and any future waiver problems.
The employer should closely assess the essence of the complaint: in relation to that sort of complaint, for example, is the Faragher-Ellerth protection likely to be asserted? If so, outside counsel should decide whether to treat their correspondence with the prosecuting attorney under the basis that the attorney-client confidentiality would not cover those communications.
The employer should carefully calculate the risk that there will be lawsuits. This “big picture” review will help the contractor decide if an inadvertent waiver of the right of the attorney-client could be a serious risk and, if so, how best to mitigate or eliminate that danger.
In advising the employer and/or initiating the inquiry, the employer should consider what positions additional attorneys and/or an investigating attorney should perform.
In order to specifically separate the role of the prosecutor (who will conduct the fact-gathering) from the role of the outside counsel, the employer will choose to produce a detailed investigative document at the outset (who will be advising the employer on its response to the results of the investigation).
The supervisor should take sufficient care in the process to ensure that the agent and outside counsel do not go beyond their appointed positions.
Taking these steps will help an employer increase its chances of minimizing accidental disclosure of classified information, both before and during an investigation.