206 - Ethical Issues in
Employment Investigations and
Litigation
Deborah L. Martin
Heather Anderson
Darren S. Chiappetta
Wanda M. Morris
SCENARIO
Welcome to the UHOH – the Ultimate Home of
Harmony
• Female General Counsel, Cant Helpmyself, initiates an affair with male staff
counsel, Takin Advantageof. She wisely ends it after a couple of months.
• Staff counsel’s wife, Notso Fast, finds out and calls the company’s ethics
helpline to complain. She offers pics of the 2 of them that she found on the
internet – apparently the 2 were facebook friends under assumed identities.
• Cant Helpmyself retaliates against Takin Advantageof for making this
public. He decides to sue the company and obtains counsel. He
communicates with both Notso Fast and his counsel, Easy Quickbucks, on his
personal smart phone used for company business.
• Cant Helpmyself also obtains separate counsel, Bob Laub, but communicates
with the Bob Laub Law Firm using her company email.
WHY INVESTIGATE?
• Triggers
– Helpline
– Internal Complaint
– External Complaint/Litigation
– Audit
• Benefits
• Consequences
WHY INVESTIGATE?
• Triggers
• Benefits
– Faragher/Ellerth Defense
– Avoid Punitive Damages
– Prepare Defense/Know what Feds will find
• Consequences
WHY INVESTIGATE?
• Triggers
• Benefits
• Consequences
– Punitive damages
– Surprised executives
WHO SHOULD INVESTIGATE?
•
•
•
•
•
Human Resources
In-house counsel
Outside counsel
Audit
Private investigator
INTERVIEW PREPARATION
PREPARING FOR INTERVIEWS
• Who should be interviewed?
– How broad does the investigation need to be
(e.g., what is needed to determine the outcome)?
– Does order matter (e.g., which witnesses should
be interviewed when)?
• What documents are needed?
– Some can be collected and reviewed prior to
interviews
– Some may need to be requested during
interviews.
PREPARING FOR INTERVIEWS
• Is it mandatory for a witness to submit to an
interview?
– Does the Company have a policy requiring such?
– If so, does the policy apply (e.g., is the witness a
current or former employee)?
– Does the Company plan to enforce the application?
• Is a witness represented by counsel and
request/insist that counsel be present during the
interview?
PREPARING FOR INTERVIEWS
• Do actual or perceived conflicts of interest
related to the interviews exist?
– Between the investigator and a witness (e.g., if the
investigator reports to the witness).
– For the witness’ attorney (e.g., can the attorney
representing a witness also participate in an
interview?).
PRIVILEGE & CONFIDENTIALITY
CONSIDERATIONS
PRIVILEGE ISSUES
• Interviews by counsel
– Upjohn v. United States, 449 U.S. 383 (1981)
– In re: Kellogg Brown & Root, Inc., et al., 2014 U.S.
App. LEXIS 12115 (D.C. Cir. June 27, 2014).
• Investigation report
• Employee communication with separate
counsel
PRIVILEGE ISSUES
• Interviews by counsel
• Investigation report
– Might you want to waive the privilege?
– Admissibility issues at trial
• Employee communication with separate
counsel
PRIVILEGE ISSUES
• Interviews by counsel
• Investigation report
• Employee communication with separate
counsel
– In re Information Management Services, Inc., 2013
WL 5426157 (Del. Sept. 5, 2013)
CONFIDENTIALITY ADVISEMENTS
• Banner Health System d/b/a Banner Estrella
Medical Center and James A. Navarro, 358
NLRB No. 93 (2012).
PRIVACY AND SOCIAL MEDIA
PRIVACY AND SOCIAL MEDIA
Does an employee have a reasonable expectation of
privacy for communications conducted on employer
email/devices?
• City of Ontario, California v. Quon, 130 S.Ct. 2619
(2010)
Does the employer have a social media policy in place?
PRIVACY AND SOCIAL MEDIA
Employers should implement social networking policy
Some key elements of social networking policy:
• Clearly state that employees have no expectation of privacy in
any communications made on or with company property,
including personal communications on webmail and social
network pages.
• Remind employees that other company policies regarding
work also apply to social networking, including the company
code of conduct, compliance , confidentiality EEO, etc.
• Employees are instructed to use good judgment and take
personal and professional responsibility for what they publish
online
PRIVACY AND SOCIAL MEDIA
Determine whether and when to use information obtained from
social media sources to make employment decisions:
• Does the company have a social media policy in place and does
it adequately cover the employee’s conduct?
• Is the information protected under federal and/or state law?
• Would using the information run counter to recent NLRB
decisions?
GENERATING THE
INVESTIGATION REPORT
FORMAT OF THE REPORT
• Written Report or Verbal Report?
• Considerations
– “Formal” Investigation  Written Report
• Possible Legal Exposure
• Serious Violation of Policy (EEO / HIPAA)
• Documentation of Investigation/Result Needed
– “Informal” Investigation  Verbal Report
• Minor Policy Infractions (Workplace Conflict)
• Quickly Resolved Misunderstanding
VERBAL REPORT
BENEFITS
• Minimizes SOME risks of
investigating – documents
used for presentation are
usually Work-Product
• Provides flexibility to counsel if
compelled to testify about
investigation/findings
• Less likely to be discoverable
• More likely to remain
confidential
RISKS
• Memory/Recall can be
inexact, creating data
integrity issues
• Courts have found lack of
written report problematic
– unable to scrutinize if
thorough investigation or
sound conclusions
WRITTEN REPORT
BENEFITS
• Detailed info re:
questionable activity/legal
implications aids in
remedial recommendations
• Tangible proof investigation
conducted (dissuade gov’t)
• May be required by gov’t
agency
RISKS
• Less Flexible – confines later
testimony to
fact/opinions/conclusions in
report
• Risk it will not be privileged
or privilege will be waived
 discoverable = liability
CONTENT OF WRITTEN REPORT
• Report & Recommendations limited by scope
• Identify type of complaint & policy/law
implicated
• Factual v. Legal Conclusions? DEPENDS
– Privilege Concerns: A/C Privilege protects disclosure of
communications, not disclosure of underlying facts
(Upjohn)
• Objective, Neutral Style
– Consider if include conclusions/recommendations
– Eliminate extraneous info collected but not relevant
CONTENT OF WRITTEN REPORT
• Sample Format (if prepared by counsel)
– SUMMARY OF ALLEGATIONS
– CORPORATE RESPONSIBILITIES
– INVESTIGATION PROTOCOL
– CHRONOLOGY OF EVENTS
– RELEVANT LAW
– LEGAL ANALYSIS
– CONCLUSION
– EXHIBITS
PRIVILEGE CONSIDERATIONS
• Conducted/prepared by and for compliance 
not privileged
• Clarify investigation is not pursuant to routine
compliance function, but for a legal purpose
• Communicating mere facts may be discoverable
unless implied request for legal advice
• Even if attorney involved, ensure lawyer’s role
involves obtaining/providing legal advice (K,B,&R)
ADDITIONAL CONSIDERATIONS
• Who within the company should know the
results?
• Should employees be apprised of results?
• Remedial/Preventative measures warranted?
• Any disciplinary action against employee(s)?
• DISCLOSURE OF ALLEGATIONS / FINDINGS?
– Report to court/gov’t/regulatory agency required
or desirable?
– Public Announcement?
SELF-DISCLOSURE FACTORS
• Is Co. bound by prior obligation to do so (i.e.
industry “voluntary disclosure” commitment)
• Does the misconduct investigated involve
fraud or other criminal behavior?
• Is senior management of a public company
involved?
• Potential for better “treatment” by gov’t if
self-disclose prior to gov’t discovery?
SELF-DISCLOSURE CAUTION
• Once report shared with 3rd party, A/C Privilege
waived forever
• Assume any written report to gov’t could be
produced to plaintiffs in a civil action
• Studies of enforcement pursuant to FCPA found
no difference in penalty level for self-disclosure
vs. government independent discovery
• Conduct some investigation prior to contacting
gov’t to avoid mistakenly blowing the whistle
based on erroneous internal info
BEST PRACTICES
• Label the written report “ATTORNEY-CLIENT
PRIVILEGED AND SUBJECT TO WORKPRODUCT”
• Note that report prepared at the request of
counsel (if prepared by non-lawyer)
CLOSING DECISIONS
• Decide…INVESTIGATION NEEDED?
• Decide…STRATEGY
– Solutions range from fast & expensive to slow & cheap. No resolution is FAST &
CHEAP
• Decide…WHO INVESTIGATES
– Human Resources: Knows situation better, no privilege
– In-House Counsel: Maintains privilege
– External Counsel: More $ / Potentially more effective
• Decide…SCOPE CONSIDERATIONS
– Seriousness of allegations
– Potential Disruption to business / time and cost to investigate
– Revisit as investigation progresses  is more investigation needed, or will it change
the outcome?
• Decide…REPORTING MECHANISM
– Written report of investigation findings?
– Should report be privileged or not?
CLOSING THOUGHTS
• Know your potential challenges in asserting privilege and
confidentiality
• Understand employee privacy issues
• Ensure the appropriate internal stakeholders are notified
before any investigation begins, including corporate
communications group
– May have to address outside commentary
QUESTIONS?
THANK YOU!
Attorney-Client
Privilege and
Internal Company
Communications
Protecting communications
with in-house counsel
What’s Protected?
 Communications between company employees/officers and outside
counsel
 Communications between employees/officers and in-house counsel
 Work Product
 Self-critical analysis privilege (not followed in Florida state courts)—
protects analyses of past conduct to determine violations/improvements
 Not universally recognized
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Attorney-Client Privilege
•
“Don’t misinform your Doctor nor your Lawyer.”
•
- Benjamin Franklin
 Ancient in its roots and foundational to judicial system
 Know your rules (U.S. v. United Shoe Machinery Corp.; Deason)
 Companies are people too (Upjohn Co. v. U.S.)
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Privilege Basics
 Designating a communication “privileged” or “confidential” is not
dispositive on establishing privilege
 Communication is broad, includes non-verbal
 Privilege lasts during or anytime after termination of attorney-client
relationship
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The Rules: Federal
 To assert privilege must be a client or sought to become a client
 Person receiving the communication must be acting as a lawyer
 Communication must be between the lawyer and the client and
exclusively, in confidence
 Communication must be for purpose of securing legal services, a legal
opinion, or assistance with a legal proceeding
 Privilege has been claimed by client or attorney and not waived
 US Supreme Court--United States v. United Shoe Machinery Corp.
(1950)
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The Rules: Florida
 Communications made “but for” contemplation of legal services;
 Communication made at direction of superior;
 Superior requested communication as part of corporation’s effort to secure
legal advice or services;
 Content of communication relates to legal services being rendered and
subject of communication is within employee’s scope of duties; and
 Communication is not disseminated beyond those that need to know (no
waiver).
 Southern Bell Telephone and Telegraph Co. v. Deason
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Rule Breakers
 Mind the law
 Make clear e-mail is regarding legal advice/services
 Limit internal distribution of written correspondence
 Focus on legal issues for privileged meetings
 Don’t lose it – waiver and inadvertent waiver
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Corporations Are People Too
 Business entities are clients who can assert privilege
 Internal company communications with in-house counsel can be
privileged BUT substance matters
 Not limited to communications with upper level management
 Communications with lower-level employees protected if:
 Communication is made at direction of superior
 Subject matter is within the scope of the employee’s duties
 Scandals mean scrutiny
Akerman | 42
It’s Not Privileged, Now What?
 Fact work product—protects information relates to a case that is gathered
in anticipation of litigation
 Can be discovered upon a showing of “need” and “undue hardship”
 Opinion work product—counsel’s mental impressions, conclusions,
opinions, and theories.
 Generally protected from disclosure
Akerman | 43
Work Product: What Sticks?
 Regular business audits or investigations likely will not be protected
 Must be created for a primary legal purpose vs. business purpose
Akerman | 44
Scenario #1
 In connection with investigation by public entity and subsequent litigation:
 Counsel directed telephone company to perform independent audits of
company data containing over 1,000,000 reports pertaining to repairs
performed by the company
 While audits were typically done in course of business, these specific
audits were done in response to investigation by a government entity
Akerman | 45
What Happened?
 (a) Internal audit reports were held to be protected by attorney-client privilege,
but not work product
 (b) Internal audit reports were not protected by attorney-client privilege, but
were protected by work product; however, undue hardship mandated
production
 (c) Internal audit reports were held to protected by the attorney-client privilege
and work product
 (d) Internal audit reports were held to not be protected by either the attorney-
client privilege or work product
 (e) Internal audit reports were not protected by the attorney-client privilege,
but were protected by work product
 ANSWER: (b) (Southern Bell Telephone and Telegraph Company v. Deason,
632 So. 2d 1377 (Fla. 1994))
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Take Aways
 Audits may not be considered “communications” covered by the attorney-
client privilege
 Audits performed in regular business likely are not protected by work
product
 Even audits performed in anticipation of litigation may have to be
disclosed if the underlying information audited is so voluminous that it
would cause “undue hardship” for the other side to audit the same
information
Akerman | 47
Scenario #2
 In connection with investigation by public entity and subsequent litigation:
 In-house counsel directed employees to give interviews with security
personnel as a result of pending investigation by government entity
 Statements made by employees to security personnel were shared by
in-house counsel to personnel managers
 Personnel managers summarized the communications and used them
for panel recommendations for employee discipline
Akerman | 48
What Happened?
 (a) Panel recommendation summaries were held to be protected by
attorney-client privilege and work product
 (b) Panel recommendation summaries were held to not be protected by
attorney-client privilege, but were protected work product
 (c) Panel recommendation summaries were held to not be covered by
either the attorney-client privilege or work product doctrine
 (d) Panel recommendation summaries were held to be protected by the
attorney-client privilege, but not work product
 ANSWER: (c) (Southern Bell Telephone and Telegraph Company v.
Deason, 632 So. 2d 1377 (Fla. 1994))
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Take Aways
 Underlying communications comprising recommendations are the focus, if
not directly between attorney and employee—not privileged
 Although initial communications may be requested in anticipation of
litigation, using those communications for primarily business purposes
voids protection
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Scenario #3
 In-house counsel for corporation requested to review environmental
provisions of an asset purchase agreement
 In-house counsel meets with opposing side’s lawyers and negotiates
environmental provisions of asset purchase agreement for his company
 In-house counsel was present for execution of asset purchase agreement
 After execution, in-house counsel negotiated matters to be included in the
schedule to the asset purchase agreement
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What Happened?
 (a) In-house counsel’s communications with his company regarding asset
purchase agreement were protected by attorney-client privilege, but not work
product
 (b) In-house counsel’s communications with his company regarding asset
purchase agreement were not protected by attorney-client privilege, but were
protected work product
 (c) In-house counsel’s communications with his company regarding asset
purchase agreement were not protected by attorney-client privilege or work
product
 (d) In-house counsel’s communications with his company regarding asset
purchase agreement were protected by both attorney-client privilege and work
product
 ANSWER: (c) (Georgia-Pacific Corporation v. GAF Roofing Manufacturing
Corporation, 1996 WL 29392 (S.D.N.Y 1996)).
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Take Aways
 Do not send in-house counsel as primary negotiator of any provision of
any agreement
 Minimize in-house counsel’s role as advising behind the scenes under
communications specifically designated as those seeking legal advice
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Keep it Privileged:
Best Practices for Ensuring Communications are Protected
 Wear the “right hat”
 Use different “control group” for legal e-mails/meetings/teleconferences
 Delete, Don’t Auto-complete
 Double, triple check your “to’s,” “cc’s” and “bcc’s”
 Be careful, careful with bcc’s
 Non-lawyers, avoid sending e-mail communications and/or documents you intend to be privileged to
both in-house counsel and other non-lawyers.
 “Affordable Bio Feedstock, Inc. v. Darling Intern. Inc. (MD Fla. 2012) (citing In re Vioxx for
proposition that simultaneous delivery of document or communication prevents claim that primary
purpose of communication/document was for legal services. Copying non-lawyers, however,
triggers fact-based inquiry to determine whether primary purpose was legal)
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Staying out of the Hot Seat
 Minimize role in employee investigations
 What if?
 Employee complaint filed directly with in-house counsel
 In-house counsel should document in non-privileged manner and
then unambiguously distinguish privileged legal communications
 If timing of complaint becomes an issue, company will not want to
rely on otherwise privileged communication
 Don’t become a fact witness
 Step away from the negotiations
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