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Ensuring Privilege When Using an Outside Investigator

Employees cross the threshold of the human resources department on a daily basis—often with basic questions about benefits or vacation, but sometimes with concerns of misconduct by other employees, managers, or executives. If an employee complains of egregious wrongdoing, especially committed by an upper-level employee such as a chief financial officer, the human resources staffer may seek direction from an HR vice president or general counsel in assessing appropriate next steps.

The solution to this scenario is often to engage an unbiased, outside investigator who has no preconceived biases concerning the parties involved and has experience investigating sensitive and potentially embarrassing concerns. Outside investigators are skilled in asking the appropriate, probing questions and conveying the acquired facts to decision makers. One important factor to consider at the outset of an investigation is determining whether an investigation conducted by this investigator can be protected by the attorney-client privilege and therefore not discoverable in any future litigation, and if so, how?  

What is the attorney-client privilege?

The attorney-client privilege protects communications between attorney and client that are made for the purpose of furnishing or obtaining professional legal advice. A client has “the privilege to refuse to disclose, and to prevent any other person from disclosing, confidential communications between the client and his or her attorney.”[1] That privilege belongs “to the client, not the attorney, and hence only the client may waive it.”[2]

There are three keys to maintaining attorney-client privilege in an employee complaint investigation conducted by an outside, third-party investigator:

  • First, define the scope and purpose of the investigation before it begins;
  • Second, assist company’s counsel in providing legal, and not business, advice;
  • Third, communications and work product between the investigator and the client must be maintained in strict confidence and not disclosed to anyone outside of the attorney-client relationship.

Define the investigation’s scope and purpose.

Define the investigation’s scope and purpose in both an engagement letter and an investigation plan.  Both documents require the investigator and the company to thoughtfully consider the reasons for any investigation. Who should retain the investigator? To whom should the investigator report? What is the objective of the investigation?

First, general counsel can retain the investigator. The engagement letter or retainer agreement can specify that the investigation would be subject to attorney-client privilege unless the client waives the privilege or a court finds that the investigation was not privileged. An investigation plan should always be drafted prior to beginning any actual investigatory work. Along with defining the background of the complaint, the issues to be investigated, and key contacts, an investigation plan can state that the investigation is “confidential and work product privileged.”

A California appellate court reviewed a retention letter between the City of Petaluma and an outside lawyer hired to conduct an investigation into a female firefighter’s claim of gender-based discrimination and harassment.[3] The retention agreement stated that the investigator was hired to “conduct impartial fact-finding” rather than give “legal advice” as to actions to take because of the investigation’s findings.[4] 

The language in the retention agreement notwithstanding, the court found that the investigator’s report was privileged because the outside lawyer had to use “legal expertise to identify the pertinent facts, synthesize the evidence, and come to a conclusion as to what actually happened.”[5] This use of legal expertise was sufficient to establish an attorney-client relationship and provide privilege to communications as well as the ultimate report. The court did not determine whether notes of interviews should be privileged. Also, the city did not rely on the investigation as a defense; had the city done so, the investigation itself would have become an issue for the finder of fact and therefore would be discoverable. This case gives employers some confidence that outside counsel can conduct investigations that will remain confidential. 

Help company’s counsel provide legal advice.

For an investigation to be privileged, its goal should be to assist in the provision of legal advice rather than business advice. If the investigation is conducted in the ordinary course of business, it will likely not be privileged. To keep an outside, third-party investigator’s work privileged, its purpose should be to help the company’s counsel provide legal advice to the company.[6] In Collardey, the plaintiff alleged that the defendant discriminated against him on the basis of disability when it terminated him.[7] The defendant retained an investigator to conduct an internal investigation into complaints made by current and former security employees.[8] The privilege was upheld where the investigator was hired to conduct an investigation under the direction of the company’s legal counsel for the purpose of assisting legal advice around anticipated litigation.[9]

If general counsel conducts an internal investigation to provide legal advice to the company, but seeks assistance from non-lawyers in that investigation, would the non-lawyers’ work be privileged?  The attorney-client privilege is not waived simply by virtue of the non-lawyer’s involvement.[10] Again, the key question is the purpose for which the entity was retained.

In another recent case, a court reviewed whether an investigation into a distributor’s business practices under the Foreign Corrupt Practices Act was privileged.[11] The company retained a law firm to investigate “possible violations of laws related to the distribution” of products in China. The court held that as long as one of the “significant purposes” for the investigation is obtaining legal advice, the attorney-client privilege prevailed.[12] In another case related to alleged misconduct by an executive, the former CEO of Barnes & Noble challenged the claim of attorney-client privilege to the General Counsel’s notes of the interview of the complainant. The court held that the because an accusation of misconduct against the company’s top executive was made the same day as external counsel was retained supported the privilege claim.[13]  

Many investigations are conducted as a regular part of a company’s safety and regulatory compliance efforts and in the ordinary course of business. Such investigations do not merit privileged status, as they are for business rather than legal purposes.

Do not communicate with or provide work product to anyone outside of the attorney-client relationship.

Disclosure, whether intentional or inadvertent, of investigation information to outside parties can waive the attorney-client privilege. Any investigator must proceed with caution in all communications, whether verbal or electronic. To maintain privilege, sharing investigatory materials with third parties must be “necessary, or at least highly useful for the effective consultation between the client and the lawyer.”[14] If company lawyers conducting an internal investigation rely upon non-lawyers to provide information to the company, the privilege is not waived.[15]

Even if an employer successfully keeps investigation information within the attorney-client relationship, it may choose to waive the attorney-client privilege to show that it conducted a prompt and objective investigation into a complaint. When an employer offers the fact of a thorough investigation as an affirmative defense to a plaintiff’s claims, the evidence of the “thorough” investigation becomes discoverable. A company may begin an investigation with a plan to keep it privileged; however, the company may realize that the efficacy of its investigation relieves it of some liability. If that is the case, the company will likely choose to release its investigation file, as the investigation itself is the company’s best defense.   


Before beginning an employee complaint investigation, consider engaging an outside investigator to ensure an unbiased investigation. At the start of such an investigation, determine whether the maintenance of the attorney-client privilege is important.  If so, memorialize its privileged status in a retention agreement and investigation plan. During the investigation, ensure that the investigator helps legal counsel provide legal advice rather than business advice and does not communicate with anyone outside of the attorney-client relationship. Proper planning and management of an investigation can save its privileged status.

[1] The Free Dictionary, Attorney-Client Privilege,

[2] Id.

[3] City of Petaluma v. Superior Court, 248 Cal. App. 4th 1023 (2016).

[4] Id.

[5] Id.

[6] See Collardey v. Alliance for Sustainable Energy, LLC, 406 F.Supp.3d 977 (2019)

[7] Id.

[8] Id.

[9] Id.

[10]Wiener, Gatewood, Massey, McLaughlin, Owen, Paul, Rubin, and Aguirre, Legal privilege of corporate internal investigations under US law—2019 caselaw update,

[11] Cicel (Beijing) Science & Technology Co. LTD v. Misonix, Inc., 331 F.R.D. 218 (E.D.N.Y. 2019).

[12] Id.

[13] Parneros v. Barnes & Noble, Inc., No. 18-cv-7834, 2019 WL 4891213 (S.D.N.Y. Oct. 4, 2019).

[14] United States v. Kovel, 296 F.2d 918 (2d Cir. 1961).

[15] See Weiner, Gatewood