New Jersey Appellate Division Clarifies Discovery Limits For Attorney-Led Workplace Investigations

Employers frequently retain outside counsel to investigate workplace complaints involving harassment, discrimination, retaliation, or other sensitive employment issues. A common question that follows is whether the attorney’s notes, communications, draft reports, and other investigative materials must later be produced if litigation ensues.

In C.S. v. Brick Recycling Company, Docket No. A-0628-25, approved for publication on June 1, 2026, the New Jersey Appellate Division provided significant guidance on that issue. Although the court reaffirmed the principles established nearly three decades ago in Payton v. New Jersey Turnpike Authority, it clarified how trial courts must analyze privilege claims and the scope of any waiver when an employer relies on an attorney-led investigation as part of its defense.

Background

The case arose from a workplace sexual harassment claim brought under the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -50. After the employee, identified in the opinion only by his initials to protect his privacy, complained internally, the employer retained outside counsel to investigate the allegations. Although the employer produced the attorney’s final investigative report during discovery, it withheld thirty-six pages of documents including attorney notes, communications, draft reports, and other investigative documents on the grounds that they were protected by the attorney-client privilege and work-product doctrine. The trial court ordered production of all withheld materials, concluding they were not privileged under Payton.

Defendants sought leave to file an interlocutory appeal of the trial court’s ruling, which the Appellate Division granted.

The Court Rejected an “All-or-Nothing” Approach

The Appellate Division vacated the trial court’s order and held that Payton does not require wholesale disclosure of every document associated with an attorney-led investigation simply because the employer relies on the investigation in defending the case. Instead, trial courts must conduct a careful document-by-document and, when necessary, page-by-page and line-by-line in camera review to determine:

• whether the attorney-client privilege or work-product doctrine applies;
•  whether the employer has waived those protections by asserting the investigation as part of an affirmative defense; and
• if waiver exists, whether particular documents or portions of documents remain protected because they are only “tenuously related” to the asserted defense.

Clarifying “Tenuously Related”

One of the opinion’s most important contributions is its guidance on how trial courts should apply Payton’s undefined “tenuously related” standard, since neither the Supreme Court nor any prior published opinion had defined that phrase. The Appellate Division suggested that a document is sufficiently related to the defense if it could:

• support the employer’s position by demonstrating the thoroughness or reasonableness of the investigation; or
• undermine that defense by, for example, suggesting the employer improperly influenced, limited, or compromised the investigation.

Conversely, documents—or portions of documents—that bear little or no relationship to the affirmative defense may remain protected despite any waiver.

Timing of an Investigation Is Not Dispositive

The Appellate Division also corrected the trial court’s apparent assumption that attorney-client privilege or work-product protection could not apply simply because the investigation began before the lawsuit was filed. The court cautioned, however, that timing can still be a relevant, though not dispositive, factor.

Instead, the key inquiry is whether litigation was reasonably anticipated and whether the attorney was acting, at least in part, to provide legal advice or to prepare for anticipated litigation. The court recognized that attorneys conducting workplace investigations frequently serve a dual role, investigating facts while also providing legal counsel.

Draft Reports May Receive Greater Protection

Another noteworthy aspect of the opinion is the court’s discussion of draft investigative reports. Although the Appellate Division reached no definitive holding on the issue, it questioned whether the attorney’s draft report should be disclosed to opposing counsel at all, analogizing it to draft expert reports, which court rules generally shield from discovery (absent a showing of substantial need and undue hardship) because they may reveal an attorney’s mental impressions, conclusions, opinions, or legal theories. The court directed the trial court to reconsider whether the draft report should be produced.

Practical Takeaways for Employers

The decision provides several practical lessons for employers and counsel conducting workplace investigations:

• Attorney-led investigations continue to receive meaningful privilege protections, even when litigation has not yet commenced.
• Invoking an investigation as part of an affirmative defense may result in a waiver of privilege, but that waiver is not automatically unlimited.
•  Courts must analyze privilege on a document-by-document and often line-by-line basis, with redactions where appropriate.
• Draft reports, attorney notes, legal advice, and attorney mental impressions may remain protected if they are not sufficiently related to the employer’s asserted defense.
• Detailed privilege logs and clearly defined engagement letters remain critical in preserving privilege claims and assisting courts in conducting the required in camera review.

Looking Ahead

C.S. v. Brick Recycling Company provides important clarification for employers that rely on outside counsel to investigate workplace complaints. While the decision confirms that asserting an attorney-led investigation as part of an affirmative defense may result in a limited waiver of privilege, it also reinforces that the waiver is not an all-or-nothing proposition. Courts must carefully distinguish between materials that genuinely bear on the defense and those that continue to reflect protected legal advice or attorney work product.

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