What Employers Should Know About Conducting Internal Investigations

The attorney-client privilege is an issue that extends beyond the scope of this article. However, a general overview of the attorney-client privilege is located in the following section.

The U.S. Supreme Court stated that in a hostile work environment case, prompt corrective action may insulate an employer from liability as an affirmative defense where the harassment was perpetrated by a supervisor; however, no tangible job action was taken against the employee. See Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). See also McGrath v. Nassau County Health Care Corporation, 204 F.R.D. 240 (E.D.N.Y. 2001); Fuller v. City of Oakland, 47 F.3d 1522 (9th Cir. 1995).

See Gagnon v. Sprint Corporation, 284 F.3d 839 (8th Cir. 2002) (in-house counsel asserts attorney-client privilege, as well as work-product privilege, to protect investigative file); Upjohn Company v. United States, 449 U.S. 383, 389 (1981) (privilege may be asserted by in-house counsel). See also EEOC v. Rose Casual Dining, L.P., 2004 WL 231287 (E.D. Pa. 2004) (outside counsel investigation, separate from internal investigation, was protected by the work-product doctrine).

In re Linerboard Antitrust Litigation, 237 F.R.D. 373, 381 (E.D. Pa. 2006) (the attorney-client privilege applies in the corporate context when the corporate employee, acting at the direction of superiors, seeks legal advice or provides information to legal counsel for advice and the other privilege criteria are also met); Breneisen v. Motorola, Inc., 2003 WL 21530440 (N.D. Il. 2003) (portion of internal investigative file is protected from discovery where internal HR department is receiving legal advice from in-house legal department).

See In re Grand Jury Subpoena, 415 F.3d 333, 338-340 (4th Cir. 2005) (outside attorneys hired by in-house counsel to conduct investigation; employee witnesses are ultimately not entitled to assert attorney-client privilege to thwart disclosure of investigation interviews where privilege attached to corporate client, not employees); cf. United States v. Schwimmer, 892 F.2d 237, 243-44 (2d Cir. 1989) (joint defense privilege may extend attorney-client privilege where parties share a common interest in litigation). However, an employee's cooperation in an internal investigation, without a joint strategy, was not sufficient to establish the common interest for a joint defense and extension of the attorney-client privilege. United States v. Weissman, 195 F.3d 96, 100 (2nd Cir. 1999). See also discussion at Internal Corporate Investigations: Legal Ethics, Professionalism and the Employee Interview, 2003 Colum. Bus. L. Rev. 859, 888-892.

See Pray v. The New York City Ballet Company, 1998 WL 558796 (S.D.N.Y. 1998) (court distinguishes between outside law firms conducting sexual harassment investigations, which were not protected by attorney-client privilege because defendant asserted the investigations as a defense, in contrast to communications with attorneys at the same outside firm that were protected from disclosure under the attorney-client privilege because they were initial and concluding communications related to legal advice).

See Snell v. Suffolk County, 782 F.2d 1094, 1104 (2d Cir. 1986) (once employer is aware that employee[s] are subject to sexual harassment, an obligation arises to take reasonable steps to remedy it).

It is possible that a nonunion employee may attempt to exercise Weingarten rights, the right of a union employee to request a coworker be present in an investigatory meeting that may lead to disciplinary action, in a nonunion setting. See Epilepsy Foundation of Northeast Ohio v. NLRB, 268 F.3d 1095 (U.S. App. D.C. 2001). If such a request is made by a witness in the context of an internal investigation, even in a nonunion environment, the employer should seek advice from legal counsel in addressing the request.

See Saxton v. AT&T, 10 F.3d 526, 535-36 (7th Cir. 1993) (court held that investigation was reasonable when initiated by the head of the department on the day after being advised of the employee's complaint).

See Swenson v. Potter, 271 F.3d 1184, 1193 n.8 (9th Cir. 2001) (court held the employer was not required to separate the two parties pending the investigation; however, employer must make an effort to eliminate contact other than business related between the parties).

This article provides general information and is not intended to be a comprehensive review of the subjects and matters covered herein. The information provided herein does not constitute legal advice or opinion, nor should it be construed in such a manner.