The Federal Circuit Court has ordered that an employer must provide a terminated employee with the confidential report prepared by a law firm, recommending that employee’s dismissal.
A law firm had been engaged by the employer to investigate an employee’s actions in the workplace and to give legal advice to the employer based on their findings. The law firm prepared a confidential report to this effect and presented it to the board of the employer company. The employee was dismissed as a result of the findings and pursued the report as part of an adverse action claim against the employer. The employer refused to disclose the report, arguing that it was confidential and covered by legal privilege.
Judge Whelan ordered that the report be made available to the employee. The fact that it was a law firm conducting the investigation did not automatically deem the document to be covered by legal privilege. The investigation could have been carried out by a non-legal entity in much the same way. The final report contained some legal advice, which may attract legal privilege, but was mostly non-legal recommendations that were highly relevant to the decision to terminate. Judge Whelan said it would be unfair to deny the employee access to the “factual basis on which the board formed the reasons which gave rise to the recommendation” that the employee be dismissed.
Key points for employers:
- Where a law firm undertakes an investigation and provides a report, it is important to ensure that any legal advice or recommendations are not contained in the general report.
- In particular, if the work carried out by an external lawyer is substantially non-legal, the report produced may not be privileged.