The California Court of Appeal’s recent decision in Paknad v. Superior Court is a reminder that employers cannot rely on the attorney-client privilege or attorney work product protection to fully shield workplace investigation materials from discovery, particularly when the employer defends itself by relying on the adequacy of its investigation.

Background:

In Paknad, the employer retained outside counsel to investigate two formal complaints of discrimination, harassment and retaliation. The investigator produced two reports with her findings and conclusions. Following a lawsuit filed by the complaining employee, Paknad, the employer asserted avoidable consequences as an affirmative defense. Specifically, the employer cited the thoroughness and independence of the investigation in response to form interrogatories.

Key Holdings:

The Paknad court found that, by relying on the thoroughness and independence of the investigations in its affirmative defense, the employer placed the independence and adequacy of the investigations at issue. The Paknad court held that the employer therefore waived attorney client privilege and attorney work product as to the investigator’s factual findings in the reports and any information in the report or underlying investigative materials, including interview notes, that was relevant to the scope or adequacy of the investigation and the independence of the investigator. The court specified that the investigator’s interpretation and weighing of the evidence, assessment of the credibility of witnesses, and determination of whether the complainant’s allegations were substantiated were all relevant to the scope and adequacy of the investigations; thus, because the employer had relied on the adequacy of its investigation as part of its defense, it had waived any privilege or work product protection for all these materials.

The court noted that if the investigator’s report contained factual findings regarding a third-party complainant, that information might exceed the scope of the employer’s waiver, and might be able to be redacted from the report produced to the plaintiff. The question the court would consider is whether the third party’s complaints bear on the scope and adequacy of the employer’s investigation of the complaint.

What this means for California Employers:

This decision reinforces the need for disciplined investigation practices including a narrowly tailored scope and reporting specific to the issues the Complainant raised. It is also a reminder for employers to have realistic expectations about confidentiality and to be strategic in how it asserts affirmative defenses. WTK’s dedicated workplace investigations team can help you conduct defensible investigations, and our entire employment team stands ready to assist with analyzing privileges and strategic considerations regarding use of investigative findings.

If you have questions about how this new case/this new rule will affect your business or advice about how to implement these new requirements, please contact us.

• Loleena Ansari May (lmay@wilsonturnerkosmo.com)
• Katie M. McCray (kmccray@wilsonturnerkosmo.com)

Wilson Turner Kosmo’s Special Alerts are intended to update our valued clients on significant employment law developments as they occur. This should not be considered legal advice.