The California Court of Appeal recently confirmed an important principle for attorney workplace investigators and their clients: a workplace investigation conducted pursuant to an attorney-client relationship is privileged although the attorney workplace investigator’s role is limited to factual findings and does not extend to providing legal advice. See City of Petaluma v. Superior Court of Sonoma County (Waters), A145437 (June 8, 2016, pub. order June 30, 2016).
The City of Petaluma hired an external attorney investigator to conduct an investigation concerning claims of discrimination, sexual harassment and retaliation that employee Andrea Waters (a firefighter and paramedic) filed with the Equal Employment Opportunity Commission (EEOC) after going on leave. Waters had not previously voiced any complaints to her employer. Shortly after filing her EEOC charge, while still on leave and before an investigation commenced, Waters resigned.
The investigator’s retention agreement specified that she would use her “employment law and investigation expertise to assist [the City] in determining the issues to be investigated and conduct impartial fact-finding.” As is typically the case, the retention agreement specifically provided that the investigator would “not render legal advice relating to this matter” including “the legal implications and actions the City should take based on the results of the investigation.”
Waters served discovery demanding the investigation report and other documents relating to the investigation. She argued that the requested documents did not constitute privileged attorney-client communications or work product. The trial court agreed with Waters’ reasoning that the investigation and report did not constitute attorney-client communications because the investigator’s retention agreement specified that the investigator would not provide legal advice and, even if the investigator had offered legal advice, the privilege would extend only to communications containing legal advice and not to the factual investigation.
The trial court also concluded that any applicable privilege was waived because the City put the investigation at issue by asserting an avoidable consequences defense (arguing that before resigning her position, Waters unreasonably failed to take advantage of any preventative or corrective opportunities and failed to take reasonable and necessary steps to avoid the harms or consequences she allegedly suffered).
After the Court of Appeal denied the City’s petition for writ of mandate challenging the trial court’s order, the California Supreme Court granted a writ of review and transferred the matter back to the Court of Appeal.
The Court of Appeal held that the trial court was wrong to reject the City’s claim of privilege because the investigator’s retention did not include providing legal advice to the City. It noted that the plain language of Evidence Code section 951 (relating to the application of the attorney-client privilege and the work product doctrine) refers to “legal service or advice” in an attorney’s professional capacity, supporting the conclusion that an attorney-client relationship may exist when an attorney provides a legal service without also providing advice.
The Court noted that the dominant purpose of the investigator’s representation was to provide legal services to the City so that the City’s attorney could advise the City on the appropriate course of action. The investigator “was expected to use her legal expertise to identify the pertinent facts, synthesize the evidence, and come to a conclusion as to what actually happened.” The investigator “was not merely a fact finder whose sole task is to gather information and transmit it” to the client. Rather, the Court concluded, as have other courts, that “fact-finding which pertains to legal advice counts as ‘professional legal services’”: “[t]he first step in the resolution of any legal problem is ascertaining the factual background and sifting through the facts with an eye to the legally relevant.” Waters at *9.
The Court also concluded that the City did not waive the privileges associated with the investigation by asserting an avoidable consequences defense (thus putting the adequacy of the investigation into issue) where the investigation was conducted after Waters left her employment. This is because Waters could not have taken advantage of any corrective measures adopted in response to the investigation, and the investigation would not demonstrate that the employer took reasonable steps to prevent and correct workplace harassment while the employee was still employed.
The Takeaway: Employers and their litigation/advice attorneys should confirm that their impartial workplace investigator’s retention agreement appropriately defines the role of the investigator to both preserve the investigator’s neutrality and keep the investigation privileged, unless and until the employer opts to place the investigation at issue.
Impartial and independent attorney workplace investigators can (and should) specify in their retention agreements that they will not provide legal advice. The Waters decision confirms that employers do not lose privilege protections when the employer appropriately retains an impartial attorney investigator who provides legal expertise and services limited to reaching factual findings, leaving the job of providing advice on the implications of those findings to litigation and advice attorneys.
