United States: Are Your HR Investigation Notes Protected Against Disclosure? Maybe, Maybe Not

Last Updated: April 22 2016
Article by Alta M. Ray

Just last month, two federal district courts reached different conclusions, further contributing to the confusion as to whether notes taken during a Human Resources department investigation of a discrimination or harassment complaint are protected from disclosure in subsequent litigation.

The Work Product and Attorney-Client Privileges

The work product privilege or rule protects material from disclosure where a party or its representative prepared the material in anticipation of litigation or for trial. This privilege does not apply to materials generated in the ordinary course of business irrespective of whether there would have been litigation. This privilege can attach even if the materials were not prepared at the direction of outside counsel. In contrast, the attorney-client privilege protects disclosure communications against production where they were made in confidence by a client to his or her attorney for the purpose of obtaining legal advice.

The Faragher-Ellerth Defense

In federal discrimination law, an employer may defend against a sexual harassment action (where no tangible employment action was taken, i.e. a termination) if it can prove that (1) it exercised reasonable care to prevent and correct any harassing behavior; and (2) the employee unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided. In attempting to prove the first part of this defense, employers often point to the existence of an anti-harassment policy and complaint procedure and/or that they performed an investigation into the complaint. Where the employer puts the reasonableness of its investigation at issue by asserting this defense, it waives any privilege that may attach to the investigation-related documents. But where an employer does not put its investigation into issue or otherwise does not try to rely on investigation-related documents to prove its defense (although this may prevent them from effectively proving it), the privileges remain intact.

The Cases

In Ambrose-Frazier v. Herzing, Inc., a Louisiana district court decided that the work product rule and the attorney-client privilege did not apply to investigation notes prepared by a company's HR Director who also happened to be an attorney. After an employee complained of race discrimination and harassment, Herzing initiated an investigation under company policy. The employee later sued Herzing after she was terminated. In discovery, Herzing produced the HR Director's investigation notes, but redacted several lines containing her "mental impressions and evaluations of the information learned from [HR] interviews that were plainly created in anticipation of litigation."

  1. Were the investigation notes privileged? No. The court found that "[i]t is clear that, pursuant to Herzing's policy, the investigation would have been conducted regardless of whether litigation ensued. As a result, the investigation was conducted in the ordinary course of business. Accordingly, the work product privilege does not apply to [the HR Director's] notes" (emphasis mine). Herzing's argument that the attorney-client privilege applied to the notes was also unavailing, because the privilege "does not protect a communication 'simply because it is made by or to a person who happens to be a lawyer,'" and here the HR Director was not acting in a lawyer capacity when conducting the investigation.
  2. Even if a privilege did apply, did the employer waive it? Yes. Even more concerning, the Ambrose-Frazier court held that even if the work product privilege or the attorney-client privilege applied to the HR Director's notes, the company waived these privileges by asserting a Faragher-Ellerth defense to the employee's harassment claims. The court stated, with conviction: "When a Title VII defendant affirmatively invokes a Faragher-Ellerth defense that is premised at least in part on an internal investigation, the defendant waives the attorney-client privilege and work-product doctrine for all documents it creates as part of that investigation."

Separately, in Robinson v Vineyard Vines, LLC, a New York district court applied the same legal rules as the Louisiana district court did in Ambrose-Frazier to determine: (1) whether the work product privilege applied to Vineyard Vines' investigation of an employee complaint; and (2) if so, whether Vineyard Vines waived such privilege. In doing so, however, the Robinson court was careful to highlight the difference between an internal investigation in response to an employee's complaints and an investigation for purposes of defending against that employee's legal claims as "documents created during the latter portion of the investigation are privileged work product."

  1. Were the investigation notes privileged? Yes and No. The Robinson court split Vineyard Vines' investigations into two groups: pre-January 9 and post-January 9. Pre-January 9, the employee complained to two managers that she had been sexually harassed and raped by another employee and HRCG, Vineyard Vines' third-party human resources service provider, "engaged in its usual human resources administration concerning" the employee's complaints and subsequent resignation. Post-January 9, after receiving the employee's written complaint recounting her allegations and stating that she filed a police report against the accused employee and was scheduled to meet with the Human Rights Office, "the focus of HRCF's investigation shifted to gathering the information concerning the claims in the [January 9 email] that Vineyard Vines would need to respond to the Charge of Discrimination." Even though the company did not engage outside counsel until February, the investigative documents prepared post-January 9, the court found, were prepared in anticipation of litigation and were therefore protected by the work-product privilege.
  2. Even if the privilege did apply, did the employer waive it? No. Although the employer asserted the Faragher-Ellerth defense in its answer to the complaint, the court held that the employer did not waive the work-product privilege because it was not seeking to use the HR investigation notes as both a "sword and a shield." The employer was not relying on the investigation to prove its defense; rather, it was asserting that it had anti-harassment policies in place and the employee failed to take advantage of those policies during her employment.

How to Handle HR Investigations Amid the Confusion

After reading about these cases, you probably have several questions. Should we get rid of our investigation policy to preserve our Faragher-Ellerth defense? Should we only investigate if we have reason to believe the matter will end up in court? Should we engage counsel immediately after receiving a complaint of discrimination or harassment to protect the privilege?

In response, we'll say the first and most important rule is that no matter what happens, when a discrimination or harassment complaint comes in don't ignore it. Take it seriously, investigate it promptly, and protect the complaining employee (and those participating in the investigation) from retaliation.

But who should conduct the investigation? A difficult question, no doubt. Keep in mind that if the resulting investigation – the fact-finding portion of it, that is – is conducted by your in-house or outside counsel they may become fact witnesses and their notes may become discoverable. Consider whether the fact-finding portion of the investigation should be conducted by trained professionals – typically human resources or employee relations professionals or outside vendors – who will conduct a thorough, well documented accounting of what occurred.

Ideally, you should utilize your attorneys to direct and advise on the investigation to enhance the possibility that communications between the attorneys and the employer, as well as materials the attorneys create, will be privileged unless the employer asserts the Faragher-Ellerth defense and relies on the investigation. However, employers should be cognizant that, even in the absence of a Faragher-Ellerth defense, merely involving outside counsel in an investigation does not create a broad privilege protecting all investigation materials.

Instead, employers may wish to consider designating human resources employees to conduct the factual portion of the investigation and prepare the related reports, which may be discoverable, while simultaneously utilizing counsel to focus on applying the investigative facts and generating a separate legal analysis, which should be specifically identified as privileged. Although these two portions of the investigation will inevitably overlap, a plaintiff will have difficulty arguing that the privilege protecting an attorney's work product must be waived when the plaintiff has ample access through discovery to separate, comprehensive factual records from human resources.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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