United States: Personnel Investigation By Outside Attorney Protected From Disclosure In Discovery

Seyfarth Synopsis: California Court of Appeal holds that (1) an outside attorney's investigation can be privileged even though the attorney simply investigated facts, and (2) the employer does not waive the privilege simply by asserting an "avoidable consequences" defense in litigation.

The recent decision in Waters v. City of Petaluma is a welcome development for employers who retain outside attorneys to perform personnel investigations, as it provides greater assurance that those investigations will be protected from disclosure in discovery.

The Facts

Andrea Waters was a firefighter for the City of Petaluma. She claims that she was subjected to sex harassment and discrimination during her employment, and that she was retaliated against when she complained about it. She resigned from the Petaluma Fire Department three days after filing a charge with the EEOC in 2014.

The City Attorney, in response to the EEOC charge, retained an outside attorney to investigate the charge and to help the City prepare to defend the anticipated lawsuit. The retention agreement required the attorney to "tell [the City] what we believe happened, and the basis for that conclusion," and to arrive at "findings based on an impartial and professional evaluation of the evidence." The agreement stated that it created "an attorney/client relationship" between the City and the attorney investigator, that the investigation would be subject to the attorney-client privilege, and that the attorney would use "employment law and investigation expertise to assist you in determining the issues to be investigated and conduct impartial fact-finding." The agreement did not, however, ask the attorney to advise the City on what to do in response to Waters's EEOC complaint, stating: "we will not render legal advice as to what action to take as a result of the findings of the investigation."

The attorney provided a written investigation report to the City, and the City preserved the confidentiality of the report, as well as all the supporting work product. Each page of the report stated that it is confidential and attorney-client privileged.

When Waters sued the City—claiming sexual harassment, discrimination based upon sex, retaliation, and failure to prevent harassment, discrimination, and retaliation—the City asserted various affirmative defenses, including avoidable consequences. That defense asserted that the plaintiff had unreasonably failed to make use of the preventive and corrective measures regarding workplace harassment that the employer had provided, and that if the plaintiff had done so, she would have prevented the harm that she allegedly suffered.

Waters then sought to discover documents relating to the City's investigation, including the investigator's report. The City objected, raising the attorney-client privilege and the work product doctrine. Waters moved to compel production, arguing that the investigation was not privileged, and that any privilege was waived in any event when the City placed the investigation at issue by pleading the avoidable consequences defense.

The trial court granted the motion to compel, reasoning that the investigation and report were not attorney-client communications, because the investigator's retention agreement specified that she would not render legal advice to the City. The trial court also concluded that any privilege had been waived because the City put the investigation at issue by pleading avoidable consequences.

The Appellate Court Decision

The Court of Appeal reversed the trial court's ruling. First, the Court of Appeal recognized that an attorney-client relationship may exist when an attorney provides a legal service without also providing legal advice. The Evidence Code defines a "client" for purposes of the attorney-client privilege and the work product doctrine. A "client" is a person who retains a lawyer for securing "legal service or advice" in the attorney's professional capacity.

The Court of Appeal noted that the City retained an outside attorney to provide a "legal service" because the investigator was hired to use her legal skills to assist the City in developing a response to an EEOC complaint and anticipated lawsuit. The retention agreement expressly created an attorney-client relationship and also directed the investigator to use her employment-law expertise to make findings based upon her "professional evaluation of the evidence." She was not simply to gather facts and transmit them to the City. Rather, "she 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 purpose of her representation was to provide "legal service" to help the City Attorney advise the City on the appropriate course of action. The conclusion that the investigation constituted the provision of legal services to a client was reason to apply both the attorney-client privilege and the work product doctrine.

The Court of Appeal also determined that assertion of the avoidable consequences defense did not waive any privilege associated with an investigation that occurs after the employee has left employment. "[T]he assertion of an avoidable consequences defense does not put a post-employment investigation directly at issue in the litigation." Rather, the avoidable consequences defense implicates only what the employer and employee did or did not do while the employee remained employed. The City was not relying on its post-employment investigation as part of its avoidable consequences defense. Therefore, the Court of Appeal held that the City's assertion of the avoidable consequences defense did not waive any attorney-client or work product protection afforded to the outside attorney's post-employment investigation.

What City of Petaluma Means for Employers

Plaintiffs regularly seek discovery regarding an employer's prelitigation investigation, hoping to leverage the employer's industry and efforts and to mine investigative findings to use against the employer in litigation. City of Petaluma provides greater assurance to employers that those investigations will be protected from disclosure in discovery, and also provides useful guidelines for employers to follow when retaining an outside attorney to conduct a personnel investigation. Employers should carefully review their retention agreement with outside counsel who conduct investigations to make sure that the agreement provides that the parties intend to create an attorney-client relationship and that the attorney investigator is providing a legal service to the employer, if not also providing legal advice.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions