5 Privilege Lessons for Employers from Deflategate

5 Privilege Tips in Workplace InvestigationsAs I wrote about earlier this week, among the challenges Tom Brady is making in the appeal of his 4-game suspension is a challenge to the NFL’s assertion that the investigation file and the communications between the NFL and the attorney who conducted the Deflategate investigation are privileged. According to media coverage, Tom Brady requested a copy of the investigation file and of the communications between the NFL and Wells as a part of his appeal and the NFL refused asserting the attorney-client privilege.

Brady has now appealed and the suspension will be reviewed and decided by a federal judge unless the parties can resolve their own dispute through negotiations or mediation.

Deflategate highlights a recurring issue that arises when employers retain an attorney to conduct an attorney-client privileged internal investigation into allegations of workplace misconduct: What happens to the privilege if the employer later wants to rely on the results of the privileged investigation to defend the business decision it made as a result of that investigation?

As I explained in my earlier blog, courts generally have held that employers waive the privilege where they rely on the investigation as an affirmative defense in subsequent litigation.

Deflategate stands as an important reminder to employers to understand the scope of the attorney-client privilege, and to take appropriate steps to avoid unintended waivers of the privilege in connection with workplace investigations.

5 Tips for Preserving the Privilege & Avoiding Inadvertent Waiver

  1. If it is anticipated that the workplace investigation may be raised as a defense to a legal claim or otherwise voluntarily disclosed, the employer should consider retaining an investigating attorney different than its regular legal counsel. This will make it easier for the employer to limit its waiver of the privilege to the fact-finding investigation without risking a court later finding that the waiver was broader and the employer inadvertently waived the privilege as to other matters on which the investigating attorney has provided legal advice to the employer.
  1. Avoid having the investigating attorney participate in communications between the employer and its regular counsel regarding matters of legal advice. To be even more granular and mitigate the risk of an inadvertent waiver, the employer’s regular legal counsel should consider limiting his or her communications with the investigator to (i) listening to (or receiving) the investigator’s report(s) and (ii) asking follow-up questions of the investigator. Moreover, the employer’s regular counsel should not disclose to the investigator any legal advice that counsel provided to his or her client.
  1. Employers and their regular counsel should take the time to define carefully the scope and responsibilities of the participants in the investigation. By taking the time to identify and insulate those who will investigate the facts from those who will make employment decisions based on those facts, a court deciding whether communications with counsel are privileged will be able to distinguish between communications regarding the fact-finding process as compared to communications regarding the decision-maker’s assessment of the facts.
  1. The employer and investigating attorney should take steps to make clear that the investigation is being conducted to obtain legal advice. This includes advising all witnesses interview of the legal purpose of the investigation and marking materials as “PRIVILEGED AND CONFIDENTIAL.”
  1. The employer should treat as confidential all investigation-related materials and limit distribution.


workplace investigations groupWorkplace Investigations Group offers a National Directory of well-qualified attorneys who conduct impartial internal investigations.  All of its workplace investigators have 10+ years of employment law experience and have agreed to support their responsibilities to the professional and impartial workplace investigations process and the parties that they serve. It also delivers training to in-house counsel, risk managers, human resources professionals and others on how to conduct internal investigations that will withstand third-party scrutiny.  Click here for information on upcoming training in Houston, and Washington D.C. 


NFL Criticized for Using Privilege as Both Sword & Shield in Deflategate

NFL Sword & Shield PrivilegeYesterday, the NFL issued a 20-page decision upholding the four-game suspension of Tom Brady, the star quarterback of the New England Patriots.

Brady’s agent, Don Yee, quickly attacked the decision saying the appeal lacked in procedural fairness:

“The appeal process was a sham, resulting in the Commissioner rubber-stamping his own decision. For example, the Wells investigative team was given over 100 days to conduct its investigation. Just days prior to the appeal hearing, we were notified that we would only have four hours to present a defense; therefore, we didn’t have enough time to examine important witnesses. Likewise, it was represented to the public that the Wells team was ‘independent’; however, when we requested documents from Wells, our request was rejected on the basis of privilege. We therefore had no idea as to what Wells found from other witnesses, nor did we know what those other witnesses said.”

In an article earlier today, journalist Daniel J. Flynn picked up on Yee’s criticism and questioned the NFL’s “gamesmanship.” Specifically, Flynn asked

“How can the NFL simultaneously characterize Ted Wells as “independent” and correspondence related to his investigation as “privileged” because of an attorney-client relationship?”

Great question.

The answer: I don’t think the NFL’s assertion of the attorney-client privilege will withstand legal scrutiny by the Federal Court in New York, which has been asked to affirm the NFL’s decision. Here’s why.

The Wells Investigation Likely Attorney-Client Privileged

The attorney-client privilege is the “oldest confidential communications privilege known to the common law.”  It protects confidential communications made by clients, including corporate clients like the NFL, to their attorneys in order to obtain legal assistance or advice.

In the context of an investigation like the one the NFL retained attorney Ted Wells, there are two questions relative to the privilege:  (1) whether Wells was serving in his “capacity of legal advisor;” and (2) wether the NFL waive the attorney-client privilege by sharing the Wells’ investigation report publicly and repeatedly touting its independence.

In this case, I think it’s fair to say that the answer to the first question is yes.  When Wells conducted the investigation he was acting his capacity as an attorney and the investigation, investigation file and investigation report were, therefore, protected from discovery by Brady and the NFL Players Association.  However, that doesn’t end the legal analysis.

The NFL Likely Waived the Attorney-Client Privilege

The more difficult hurdle for the NFL to overcome will be to convince the judge that it did not waive the attorney-client privilege when it shared the investigation report publicly and repeatedly assured the public that the Wells investigation was independent, full and fair.

The legal case law in this area has largely developed in the context of employment discrimination cases.  In those cases, employers who invest in the expense of retaining an attorney to conduct and attorney-client privileged workplace investigation will often want to use that investigation as a defense to any subsequent discrimination lawsuit.  In doing so though, they are generally held to have waived the protection of the attorney-client privilege.

Brady Should Have Been Allowed to Review Wells’ Investigation File to Test Independence of Investigation

Federal Courts in NY (where the NFL/Brady appeal is now pending) have held that employers cannot assert the attorney-client privilege while simultaneously relying on the investigation evidence and/or findings in defense of a discrimination or harassment claim. [i] In rejecting the employers assertion of the privilege in these situations, the courts have said that the employer was attempting to use the privilege and both a sword and a shield and “this it may not do.” [ii]

In reaching this conclusion, the courts have pointed out that equity requires that a plaintiff as well as the court be permitted to explore the parameters of the investigation to evaluate the adequacy, reasonableness and independence of the investigation.

Here, it seems clear, at least to this attorney, that the NFL has placed the adequacy, reasonableness and independence of the Wells investigation directly at issue. As such, Brady and the NFL Players Association should have been provided with production of the contents of the Wells investigation file, including his communications to/from witnesses interviewed as well as to/from the NFL and others consulted during the investigation process. It is only by allowing the opportunity to review the full investigation file that they can evaluate the adequacy, reasonableness and independence of the Wells investigation.

[i] See McGrath v. Nassau Health Care Corp., 204 F.R.D. 240 (E.D.N.Y. 2001); Brownwell v. Roadway Package Sys., Inc., 185 F.R.D. 19 (N.D.N.Y. 1999).

[ii] Brownwell v. Roadway Package Sys., Inc., 185 F.R.D. 19, 25 (N.D.N.Y. 1999).


workplace investigations groupWorkplace Investigations Group offers a National Directory of well-qualified attorneys who conduct impartial internal investigations.  All of its workplace investigators have 10+ years of employment law experience and have agreed to support their responsibilities to the professional and impartial workplace investigations process and the parties that they serve. It also delivers training to in-house counsel, risk managers, human resources professionals and others on how to conduct internal investigations that will withstand third-party scrutiny.  Click here for information on upcoming training in Houston, and Washington D.C.





Investigator Diane Citrino, Esq. Featured in Attorney at Law Magazine

Diane Citrino, Esq.Regardless of how well operated an organization is, there will, inevitably, come a time when a compliance concern is raised that needs to be investigated. Planning for that day is absolutely critical.

Ask yourself: Who do you have within your organization or in your rolodex who is experienced, well-trained and ready to conduct the necessary prompt, impartial and thorough investigation into an allegation of workplace misconduct or compliance concern?

Today, it is my pleasure to share an article that features one such investigator – Diane Citrino, Esq.  Diane is an attorney located in Cleveland, Ohio and a member of the Workplace Investigation Group, a nationwide network of employment attorneys who conduct impartial investigations into allegations of workplace misconduct, such as harassment, discrimination, retaliation and more.

To learn more about Diane’s legal practice and how she draws on her childhood heroes of Nancy Drew and Perry Mason when she conducts independent corporate investigations click here to access the full Attorney at Law article.


workplace investigations groupWorkplace Investigations Group offers a National Directory of well-qualified attorneys who conduct impartial internal investigations.  All of its workplace investigators have 10+ years of employment law experience and have agreed to support their responsibilities to the professional and impartial workplace investigations process and the parties that they serve. It also delivers training to in-house counsel, risk managers, human resources professionals and others on how to conduct internal investigations that will withstand third-party scrutiny.  Click here for information on upcoming training in Atlanta, Houston, and Washington D.C.


Why is the Hawks Impartial Investigator Now the Team Messenger?

Yesterday, the Hawks’ former GM Dan Ferry told the Atlanta Journal Constitution that he’s “been asking the Hawks for many months to release the results of the Taylor investigation because I wanted everyone to have those facts. For whatever reason, the team refused to release the results until after the season ended.”

According to Ferry, the investigator had completed his investigation over 8 months ago. However, the investigator (Atlanta Attorney Bernard Taylor) only sent Ferry a summary letter advising him that the investigation did not find wrongdoing on June 19, 2015. Here’s a copy of the letter:


Taylor Letter to Ferry

As a workplace investigator, that 8 month lag between September of 2014 and June 22, 2015 when they released two letters announcing the results of the investigation leaves me asking some questions.

  • Why the 8 month lag?
  • Why was the impartial investigator asked to draft the letter to Ferry?
  • Why did the impartial investigator agree to issue the letter to Ferry?
  • When the impartial investigator agreed to issue that letter to Ferry 8 months after the investigation was complete did he forget his role as neutral and move to a role of advocate?

Why the 8 month lag?

The answer to this question seems fairly obvious: The Hawks waited 8 months to share the results of the investigation publicly because they wanted to wait until the end of the basketball season. Arguably, the Hawks successfully shielded the team and franchise from media distraction and scrutiny through this delay – and the Hawks had a good run.

Why was the impartial investigator asked to draft the June 19th letter to Ferry?

This question requires a bit more reading of the tealeaves. Here’s how Atlanta employment attorney Jimmy Daniel explains it:

“The AJC has reported that on June 19, the Hawks and Mr. Ferry reached an agreement to ‘buyout’ the remainder of his contract for an undisclosed sum and on undisclosed terms.

ESPN has taken that a step further by reporting that the letter from Alston & Bird to Mr. Ferry – dated June 19 – was a condition of that settlement.  I certainly cannot verify that ESPN is correct in that regard.  In my experience, however, it would not be uncommon for a mid-contract executive negotiating a severance package in the context of allegations of misconduct to seek such a letter.  Of course, whether he or she is successful in obtaining such a letter depends on the parties’ respective bargaining power.”

Why did the impartial investigator agree to issue the letter to Ferry?

Often employers will utilize an external investigator to review allegations of misconduct that involve senior leadership. The Hawks’ attorneys and leadership understood the value of hiring someone from the outside to investigate. With an outsider, the Hawks deflected criticism that the allegations were not properly addressed and gave them a more credible source to rely upon when it came time to make decisions based upon vetted factual findings.

What is curious with the Hawks is why the investigator wrote a letter to Ferry on June 19, 2015. While it is common for investigators to share the results of the investigation with the accused and the accuser, sometimes called a “close out” meeting, the timing – among other things – seems a bit off here.

  • The “close out” letter was written months after the investigation ended.
  • Ferry appears to have known the results of the investigation well before receiving the “close out” letter.
  • The “close out” letter appears to assert the position of the employer, not the findings of the investigator.

When the impartial investigator agreed to issue that letter to Ferry 8 months after the investigation was complete did he forget his role as neutral and move to a role of advocate?

Put another way, this question asks whether when investigator agreed to issue the June 19, 2015 letter to Ferry over eight months after the investigation was complete he compromised his impartiality as an investigator and/or moved into a role as a representative/advocate of the employer?

Federal EEO laws require that workplace investigations into related misconduct allegations must be prompt, thorough and impartial. That means both the investigation and the investigator must be impartial and neutral. IBM, for example, learned the hard way about what happens when an investigator is not neutral.

Did the Hawks and the investigator make a similar misstep here?

In looking at the bio of the investigating attorney, Bernard Taylor, there is no question that he is a very accomplished and highly skilled advocate. According to his bio, he has over 30 years of trial experience and concentrates his practice on complex commercial litigation, products liability and pharmaceutical, environmental and toxic tort lawsuits.  Additionally, he formerly conducted criminal investigations for the Detroit police force. He also has received numerous accolades for his legal advocacy.

His credentials are beyond reproach as a legal advocate. But, here’s the potential problem: Taylor wasn’t retained by the Hawks to be the team’s advocate. He was retained to be an impartial and neutral investigator.

According to the June 19th letter, Taylor’s retention was to conduct an impartial and neutral investigation into a concern that Ferry’s repetition of racially charged words in a scouting report “was motivated by racial, ethnic or country of origin bias or animus.” It appears that Taylor met this charge and delivered his report to the Hawks in September of 2014.

So, why would Taylor now – over 8 months later – write a letter to Ferry now about the investigation’s conclusions? Simply put, there does not appear to be a substantive reason for Taylor – as an investigator – to have written the letter to Ferry in June of 2015. So, again, why was Taylor the author? Perhaps, as Attorney Daniel speculated, it was part of Ferry’s contract buy out.

But, is that the role of an impartial investigator – to execute terms of a settlement? Arguably, Taylor’s conduct “served” both Ferry and the Hawks…but did it also serve the potential victims here?

As an outside attorney your actual impartiality and neutrality is imperative to the integrity of the process, but so is the perception of impartiality/neutrality. According to the Guiding Principals issued by the nonprofit the Association of Workplace Investigators:

“An outside attorney investigator conducting an impartial investigation should appreciate the distinction between the role of impartial investigator and that of advocate.”

Against these principles (and blind eye to the victims of the racially charged comments – admittedly uttered by Ferry and that originated with the Scout that he relied upon), I believe that there is a palpable argument that the investigator at least compromised the perception of his impartiality when he issued the recent letter.

Frankly, the investigator would have been better served (and the Hawks would have been better served) to have passed on the June 19, 2015 letter. Of course, this is a delicate point.

So, what do you think?


workplace investigations groupWorkplace Investigations Group offers a national directory of well-qualified attorneys who conduct impartial internal investigations.  All of its workplace investigators have 10+ years of employment law experience and have agreed to support their responsibilities to the professional and impartial workplace investigations process and the parties that they serve. It also delivers training to in-house counsel, risk managers, human resources professionals and others on how to conduct internal investigations that will withstand third-party scrutiny.  Click here for information on upcoming training in Washington D.C, Atlanta, and Houston.




Criticisms of Deflategate vs. Domestic Violence Punishments Ignore Critical Fact

DeflateGateThe media frenzy continues today as Tom Brady is anticipated to appeal his four-game suspension and connection with DeflateGate.  Brady’s suspension has been criticized for being out of proportion with other disciplinary decisions, namely that other players’ domestic violence incidents have resulted in only 2 game suspensions.

These criticisms omit a critical fact.

In Vincent’s disciplinary notice to Brady, he is crystal clear that Brady’s four game suspension is not only related to his role in deflating footballs, but also (and critically) related to his misconduct during the investigation itself.

The letter states in relevant part:

“Moreover, the report documents your failure to cooperate fully and candidly with the investigation, including by refusing to produce any relevant electronic evidence (emails, texts, etc.), despite being offered extraordinary safeguards by the investigators to protect unrelated personal information, and by providing testimony that the report concludes was not plausible and contradicted by other evidence.”

In short, Tom Brady’s failure to cooperate with the investigation undermines the ability of the NFL to take care of shenanigans (and worse) on an internal basis.  Only a few media outlets highlighted this fact.

But what’s the big deal here?  Here’s the big deal: Brady (and his agent who is also an attorney) refused to provide text messages to the investigator as requested, despite the investigator taking extreme measures to assure and confirm that the investigation would only be interested in relevant text messages.

Workplace Investigator and Attorney Diane Citrino explains it well: “In today’s digital age, text messages exchanged at or near in time to the incident are gold.”  In the “Deflategate” investigation, text messages relating to a Patriot’s staff person calling himself (or herself) “the deflater,” were the type of critical evidence evidence that “was not typically available in the past,” says Citrino.  Citrino agrees that the “DeflateGate” investigation’s conclusion that Brady was uncooperative was on point.  Indeed, the lack of cooperation suggested that Brady had motive to hide the ball, not just deflate it.

Where an employee (or NFL player) fails to cooperate with the very mechanisms intended by the employer (or League) to ferret out wrongdoing and wrongdoers quickly and efficiently, a stiff penalty – perhaps even greater than a four game suspension – is merited to ensure that any investigation into allegations of misconduct – whether domestic violence, juicing, or cursing – is taken seriously by all of the employees (or players) involved.  Without the ability to enforce the duty to cooperate it would be difficult, if not impossible, to deter any future players from gaming the system.


workplace investigations groupWorkplace Investigation Group offers a national directory of well-qualified attorneys who conduct impartial internal investigations.  It also delivers training to in-house counsel, risk managers, human resources professionals and others on how to conduct internal investigations that will withstand third-party scrutiny.  Click here for information on upcoming training in Jacksonville, FL, Washington, D.C., Philadelphia, PA, and Atlanta, GA. – See more at: http://winwinhr.com/#sthash.rtWhbCZZ.dpuf

Given the Stakes, Should the NFL Have Selected a Different Investigator in Deflategate?

Wells Independence QuestionedYesterday’s press conference by Ted Wells defending the independence of his internal investigation should serve as a reminder of the importance of selecting an investigator who will not only be independent and impartial but also be perceived as independent and impartial.

Wells and his law firm Paul Weiss had been retained by the NFL earlier this year to conduct an independent and impartial investigation into allegations that the Patriots intentionally deflated footballs in the AFC Championship Game against the Colts.

As an organization faced with the need to retain an attorney to conduct an impartial internal investigation into an allegation of misconduct, the NFL was faced with a balancing act.

On the one hand, as regular legal counsel to the NFL, Ted Wells was familiar with the NFL.  Wells had done prior investigations for the NFL and together with his colleagues at the law firm of Paul Weiss is defending the NFL in a lawsuit brought by former NFL players alleging the league deliberately and fraudulently ignored the risks of neurological damage caused by repeated blows to the head that the players suffered.

As such, Wells  was a good candidate for the investigation because he could more easily navigate the organization resulting presumably in an ability to more quickly conduct and conclude the investigation.

On the other hand, the existing relationship between Ted Wells and his law firm would create at least the appearance of a potential conflict of interest, i.e. did Wells make close calls in favor of the NFL in order to keep his current work with the NFL and curry favor for future work?

Here are my two cents: As a general matter, the higher the stakes of the investigation the more important it is to avoid even the appearance of a conflict of interest.  If an investigation is more routine in nature – think employment claims of harassment or discrimination or a potential regulatory compliance violation — then using an attorney at an organization’s regular law firm may be appropriate.

But, where – as was the case with the NFL investigation of the Patriots and Tom Brady – the stakes are high and everyone knows the report will be subject to significant media and legal scrutiny why create even the perception of a conflict of interest by selecting an attorney at the NFL’s regular law firm.

There are any number of well-qualified attorneys in the United States available to conduct an independent investigation of this type.  Given the stakes, one has to ask whether the NFL would have been better served to have selected one of those other well-qualified attorneys to conduct this investigation.


workplace investigations groupWorkplace Investigation Group offers a national directory of well-qualified attorneys who conduct impartial internal investigations.  It also delivers training to in-house counsel, risk managers, human resources professionals and others on how to conduct internal investigations that will withstand third-party scrutiny.  Click here for information on upcoming training in Jacksonville, FL, Washington, D.C., Philadelphia, PA, and Atlanta, GA.

Employment Attorneys React to Supreme Court Decision in Mach Mining v. EEOC

SupremThe United States Supreme Court yesterday settled the question of whether the Equal Employment Opportunity Commision’s statutory duty to conciliate a remedy to a Title VII violation prior to filing a lawsuit is subject to some level of judicial review. The decision was unanimous and the answer is – yes, the EEOC’s actions are subject to a “narrow” judicial review.

The Supreme Court Decision  

The Supreme Court had granted review to decide the issue of “Whether and to what extent may a court enforce the EEOC’s mandatory duty to conciliate discrimination claims before filing suit?”

Under the law, the EEOC is required to “conciliate” cases after having found “reasonable cause” that a violation of the law has occurred before it files a lawsuit against the employer. Significantly, the language of Title VII specifically requires the EEOC to “endeavor to eliminate” alleged discrimination by “informal methods of conference, conciliation, and persuasion.”

In the Mach Mining case, the EEOC sued the company for sex discrimination on behalf of a class of women who were denied jobs. Mach Mining accused the EEOC of filing the lawsuit before attempting to conciliate in “good faith” and a battle then ensued over whether the EEOC has complete discretion on conciliation, or whether its conduct should be reviewed by a court.

    EEOC’s Position: The EEOC’s position in that battle has been that the courts have no right at all to review the EEOC’s conciliation efforts. In the alternative, the EEOC argued that should there be some level of judicial review that it would be limited to confirming that (1) the EEOC had notified the employer of its reasonable-cause determination in a letter inviting the employer to conciliate the charge; and (2) the EEOC had subsequently sent a letter to the employer advising it that conciliation had failed. As such, any judicial review would be limited to confirming the existence of those two letters.

    Mach Mining’s Position: Mach Mining argued that although courts should be deferential to the EEOC that judicial review should consist of more than confirming the existence of two letters and that con. Mach Mining insisted that the EEOC’s “conference, conciliation, and persuasion” must be done in good faith, and subject to court review.

    Supreme Court’s Holding: The Supreme Court rejected the arguments of both the EEOC and Mach Mining holding that the EEOC’s conciliation efforts are subject to a narrow review but that there is no requirement that the EEOC engage in those efforts in “good faith.”

Reactions from Plaintiffs’ Attorneys

The plaintiffs’ bar sees the decision as a win for the EEOC and employees.  In fact, Atlanta, Georgia attorney Matthew Billips says “the Court got this one completely right.”  According to Billips, “good faith negotiation doesn’t work when only one side is required to do it” and since  employers are under no obligation to negotiate, much less negotiate in good faith” it would be unfair to “impose a one-sided duty on the EEOC.”

Paul W. Mollica, an attorney in the Chicago office of Outten & Golden says that the “decision abrogates a line of case authority which for years sanctioned searching discovery and judicial second-guessing about EEOC conciliation efforts” and “restores the balance that Congress intended in Title VII of the Civil Rights Act, to reward collaborative behavior.”

Donna Ballman (a Florida attorney who wrote Stand Up For Yourself Without Getting Fired and represents employees) says the Supreme Court’s decision “makes perfect sense, since there is absolutely no realistic way for a court to decide if one party is being unreasonable in a settlement discussion. While EEOC has to try to get the employer to voluntarily comply with the law, the courts are not going to tell it how to accomplish that. Frankly, it’s the employers who should be really glad that the Supreme Court didn’t order EEOC to get more forceful with scofflaw employers, and it’s taxpayers and employees who lose out when employers fail to conciliate reasonably.”

Reactions from Defense Attorneys

Although the Supreme Court’s decision was a compromise between the EEOC’s argument and the employer’s position, the defense bar views the decision as being a win for employees. Fisher & Phillips (a national law firm with 300 attorneys and 30 offices) cautions that “the decision frees the EEOC to continue its use of inflexible and frequently unreasonable demands accompanied by the threat of the EEOC’s aggressive litigation tactics and tremendous resources to force employers into settling claims. Employers will now only obtain relief against these tactics by taking cases to judgment and seeking attorneys’ fees, a costly and hardly palatable proposition.”



Internal Investigations: KBR, Inc. Fined $130,000 Over Standard Confidentiality Statement

Confidentiality in Internal InvestigationsThe Securities and Exchange Commission (“SEC”) just issued a press release announcing its “first enforcement action against a company for using improperly restrictive language in confidentiality agreements with the potential to stifle the whistleblowing process.”

At issue, was KBR, Inc.’s standard practice of requiring employees interviewed in internal investigations to sign confidentiality statements with the following language:

“I understand that in order to protect the integrity of this review, I am prohibited from discussing any particulars regarding this interview and the subject matter discussed during the interview, without the prior authorization of the Law Department. I understand that the unauthorized disclosure of information may be grounds for disciplinary action up to and including termination of employment.”

The SEC found those terms violated Rule 21F-17, which prohibits companies from taking any action that would impede whistleblowers from reporting possible securities violations to the SEC.

In addition to agreeing to pay a fine of $130,000, KBR, Inc. also agreed to amend its standard confidentiality statement signed by employees interviewed during an internal investigation to read as follows:

“Nothing in this Confidentiality Statement prohibits me from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. I do not need the prior authorization of the Law Department to make any such reports or disclosures and I am not required to notify the company that I have made such reports or disclosures.”

A copy of the complete Cease and Desist Order is available here. 

SEC Not Only Governmental Agency Concerned About Overly Broad Confidentiality Requirements in Internal Investigations

            NLRB on Confidentiality

One of the first blogs I published was about confidentiality in internal investigations. That was July 2012 and the National Labor Relations Board had just held that a blanket approach and policy requiring confidentiality during all internal workplace investigations violates employees’ concerted activity rights under Section 7 of the National Labor Relations Act (NLRA).

In April 2013, the NLRB’s Office of the General Counsel released an Advice Memorandum that I wrote about here. The Advice Memo provided additional clarification on its position on confidentiality in workplace investigations and suggested the following policy language that would be in compliance with Section 7 of the NLRA:

“[Employer] may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence.  If [Employer] reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.”

            EEOC on Confidentiality

It has long been the position of the Equal Employment Opportunity Commission that when investigating complaints of harassment or other inappropriate behavior in the workplace, an employer should keep the matter confidential to the extent possible. This stance was included in its policy guidance issued in 1990 on sexual harassment and again in its 1999 guidance on vicarious employer liability for unlawful harassment by supervisors in which the EEOC stated that an anti-harassment policy and complaint procedure should include “assurance that the employer will protect the confidentiality of harassment complaints to the extent possible.”

The EEOC though is also concerned that overly broad standard confidentiality requirements may be illegal if such policy is so broad that a reasonable employee could conclude from reading it that she could face discipline or charge for making inquiries to the EEOC about harassment if that harassment is being or has been investigated internally by your organization. Here is the blog I wrote about the EEOC’s concern. 

Insights for Employers

Confidentiality continues to be a critical aspect of the vast majority of internal workplace investigations.  It is critical for any number of reasons, including protecting witnesses from harassment, intimidation and retaliation, keeping evidence from being destroyed, ensuring that testimony is not fabricated, and preventing cover-ups. If the internal investigation is being conducted pursuant to the attorney-client privilege in order for an attorney to provide legal advice to the employer, confidentiality is also critical to maintain the protection of the attorney-client privilege as well as under the attorney work product doctrine.

As such, it is imperative that employers be able to lawfully enforce their confidentiality policies and practices when the need arises.

Here are four suggestions for addressing the need for confidentiality in certain internal investigations without running afoul of the SEC, NLRB or EEOC.

1.  Employers are encouraged to review their existing policies and practices and modify the language, as appropriate, to mirror the language approved by the SEC in the Cease and Desist Order with KBR, Inc. and the suggested language provided by the NLRB.

2.  Employers may also wish to implement a practice of documenting, on a case-by-case basis, the reasons for deciding to instruct witnesses to keep an investigation confidential. This is especially important if the investigation is being conducted pursuant to the attorney-client privilege in order to provide legal advice to the employer. In reading the Cease and Desist Order entered with KBR, Inc. the issue of the intersection with the attorney-client privilege and Rule 21F-17 is not addressed. Click here for more tips and templates for preserving the attorney-client privilege in internal investigations. 

3.  For those employers who conduct internal investigations in-house, ensuring that their investigators keep their skills up-to-date is also crucial. Workplace Investigations Group offers training courses in various locations through the year. Customized training for employers and organizations that wish to train larger groups at their own locations is also available.

4.  For employers who do not have professional staff with the experience, knowledge, and expertise to conduct legally defensible workplace investigations, I suggest they proactively identify an outside investigator who possesses these qualifications.  Workplace investigators are kind of akin to plumbers – you hope to never to need one, but when you do need one you need a good one and you need them fast.

One great source for experienced, well-qualified attorney investigators is Workplace Investigations Group. All of the attorney investigators at Workplace       Investigations Group meet or exceed the following qualification criteria:

  • Minimum of 10 years experience in employment law.
  • J.D. from an accredited law school.
  • Have professional liability insurance.
  • Experience in conducting 10+ internal workplace investigations or comparable relevant experience or training.
  • Are an attorney in good standing in at least one jurisdiction.

UPDATE:  For readers interested in other perspectives on the SEC’s Cease and Desist Order entered into with KBR, you may want to read the article in Corporate Counsel:  SEC’s KBR Action Spotlights Whistleblower Confidentiality.  I’m quoted as are attorneys from the law firms of Sherman & Sterling and Gibson, Dunn & Crutcher.  The article is free to read but you will need to sign up for a Corporate Counsel account if you do not already have one.

Is Ellen Pao Just a Gold Digger?

Gold Digger - Ellen Pao v. Kleiner PerkinsThe Pao v. Kleiner Perkins Caufield & Byers (KPCB) lawsuit is now with the jury.

The case pits a single woman – Ellen Pao – against KPCB – one of the largest and most established venture capital firms in the country.

Ellen Pao’s husband is in bankruptcy. Partners at KPCB are clearly not. Founding partner Tom Perkins, for example, is worth over $8 Billion.  General partner, John Doer — $3.4+ Billion.

Yet, despite this huge discrepancy in power and money between the parties, yesterday Kleiner Perkins’ lawyer argued to the jury that Kleiner Perkins is really the victim here – not Ellen Pao.

Essentially, KPCB’s lawyer argued that Pao shouldn’t win because she is nothing but a money grubbing, ungrateful and offensive former employee who they justly fired because she was so hard to get along with no one wanted to work with her.

Thanks to Liz Gannes’ live blog over at Recode, here are a few of the quotes from KPCB’s closing argument:

“[Ellen Pao] made a determined, deliberate, sustained attack on Kleiner, and she made sure the press knew all about it.”

“[Ellen Pao] wanted the eight figures. When Kleiner Perkins refused to pay her, she filed this lawsuit. Not because she wanted an even playing field for women. None of it had anything to do with any woman but Ellen Pao.”

“This twisting of facts isn’t a new development . . . Beginning in the fall of 2011, while her job search wasn’t working out, Ellen Pao wanted the big payout.”

“As happens in a small workplace, [Ellen Pao’s] corrosive pattern of attack alienated her co-workers and led to tension and distrust.”

“The record here is crystal clear about [Ellen Pao’s] conflicts with others despite what you just heard, an attempt to dismiss them.”

Now admittedly Ms. Pao is not without financial resources. She has two graduate degrees from Harvard (including a law degree) as well as bachelors degree from Princeton and her annual compensation when she was fired from KPCB was ~ $560,000. She is currently Interim CEO of Reddit.

But by comparison to KPCB she is still David and KPCB is clearly Goliath.

So, what do you think? How persuaded are you by KPCB’s efforts to cast itself as the victim of a money grubbing, ungrateful employee?  Is Ellen Pao one of those gold diggers Kanye West has warned us about?  

About the Author:  Lorene F. Schaefer, Esq. is an attorney and the President of Workplace Investigations Group, a nationwide network of employment attorneys who conduct impartial internal investigations and deliver training on how to conduct effective internal investigation that will withstand legal scrutiny. She is also the President of Win-Win Resolve, a consulting company founded by a group of employment attorneys to help businesses solve workplace conflict and compliance concerns at the lowest and earliest levels possible.  Lorene is available nationwide as a workplace investigator and mediator.

Will Kleiner Win the Discrimination Battle but Lose the Retaliation War?

#ellen Pao v. #KleinerPerkins Most of the commentary on the Ellen Pao v. Kleiner Perkins jury trial has been focused on whether or not Pao will prevail on her claim of gender discrimination, but the testimony over the last couple of days has revealed that it’s actually Pao’s claim of retaliation that poses the highest risk of a jury verdict.

Under the law, Pao could prevail on her retaliation claim even if she loses her discrimination claim.

If you think about it, that’s not that surprising as somehow it just seems easier for a juror to believe that the partners at Kleiner Perkins changed their behavior towards Pao after she sued them than to believe that they intentionally discriminated against her because she’s a woman.

To prevail on her retaliation claim Pao must show three things:

1) she engaged in a “protected activity”,

2) Kleiner Perkins took an “adverse employment action” against her; and

3) her “protected activity” was a substantial factor motivating Kleiner Perkins’ “adverse employment action.”

Admittedly, I’m not in the court room, but I have been following the mainstream and social media coverage.  In fact, it’s almost addicting and I’ve not been as productive as I normally am since the trial started.  I’ve particularly enjoyed reading the tweets and live blogging of  Liz Gannes and Nellie Bowles at Recode and the coverage by Davey Alba of Wired, Marisa Kendall of The Record, Nitasha Tiku of The Verge, Elizabeth Weiss of USA Today, and Jeff Elder and Deborah Gage of the Wall Street Journal.

Here’s how I see the case shaping up so far on Pao’s claim of retaliation:

#ELLENPAO retaliation claim against #KleinerPerkins

It is undisputed that Ellen Pao filed her lawsuit against Kleiner Perkins on May 10, 2012.  Filing a lawsuit clearly qualifies as “protected activity.”  So — Check on that element of her retaliation claim.

It is also undisputed that Kleiner Perkins terminated Pao only 5 months later – October 1, 2012.  Being fired is clearly an “adverse employment action.”  So — Check on that element of her retaliation claim.

That leaves only the element of causation.  According to Lynn Lieber, a California lawyer and member of Workplace Investigations Group, the California Supreme Court has not ruled on the causation standard for retaliation claims under California law.  Ms. Lieber says the likely outcome when it does is that the the standard will be “substantial motivating factor,” which is the same as it is for FEHA discrimination claims.  If not, she says the standard will be merely “a motivating factor.”

In the Pao v. Kleiner Perkins case, my reading of the commentary coming out of the courtroom is that Pao may well be able to prove the causation element of her retaliation claim even under the higher causation standard of “substantial motivating factor.”  According to media reports, Pao’s supervisor testified this week that he didn’t start documenting her poor performance until 4 days AFTER she filed her lawsuit.  That short time period between her protected activity of filing the lawsuit and the adverse action of starting to document her poor performance creates a strong inference of retaliation.  Yes, Kleiner Perkins has attempted to argue (in its Trial Brief at pages 25-26 and during the trial) that Pao’s performance had been poor for some time and that “the decision to terminate Pao’s employment was made in 2011.”

In light of her supervisor’s testimony this week, I’m not persuaded by Kleiner Perkins’ argument and don’t think the jury will be either.  The reality is that Kleiner Perkins had never placed her on a performance improvement plan or formally documented her allegedly poor performance until 4 DAYS AFTER SHE SUED THEM.

Looks like a duck.  Swims like a duck.  Quacks like a duck.  Screen Shot 2015-03-20 at 8.15.45 AM