A reminder: Some workplace investigations aren't privileged

“I refuse to find that the investigation or its underlying records were created for the dominant purpose of litigation or are subject to solicitor-client privilege.”

So said the Court of King’s Bench of Alberta recently, finding an employer wrongfully assumed its workplace investigation was privileged.

And while a different judge might have reached a different decision, this “really illustrates the risk… because it's so fact specific. Really, I think best practice is you should not assume that things are going to be privileged,” says Victoria Merritt, senior associate in the employment and labour group at Dentons in Vancouver.

“It’s a common problem, it’s like a myth: ‘Oh, if I’ve retained a lawyer… it’s privileged. In practice, it’s not that simple.”

This kind of decision is going to be a surprising reminder to a lot of folks, says Jordan Deering, partner at DLA Piper in Calgary.

“I think people have gotten complacent in thinking that, as a lawyer, you can just hire workplace investigation firm X and the whole thing will be privileged until you decide it's not privileged. And I don't think that's always the case.”

Employee seeks records from investigation

In this recent case, an employee dismissed for cause requested disclosure of various records and information concerning his termination in March 2018.

The dismissal came after allegations of sexual harassment by two other employees; a brief investigation was done internally in accordance with the company’s Respectful Workplace Policy; then, an HR consultant was hired to further investigate, while legal counsel was retained to provide advice.

The content included transcripts and recordings of interviews with the employee and the two complainants, along with details of their allegations of harassment and misconduct, including named individuals. The company said the records and information were privileged “because the investigation was in contemplation of litigation or conducted for the purpose of placing information before legal counsel for advice,” said Justice James Eamon in his decision.

But in the end, the court disagreed, and the company was ordered to disclose: the name of one complainant and particulars of their allegations; copies of the investigation materials (other than the investigation report) including a complete set of communications from both complainants and interview transcripts and notes; and an amended affidavit of records complying with the disclosure obligations for non-privileged records.

Litigation privilege, solicitor and client privilege

The focus of the case was on two privilege claims asserted by the company: litigation privilege and solicitor and client privilege (or legal advice privilege).

The company said “the dominant purpose of the investigation by the investigator and the creation of the records therein was in contemplation of litigation” by one complainant, the dismissed individual and other employees who may have been impacted by alleged harassment in their office. “Further, the only purpose was to place the information before [the law firm] for legal advice.”

Litigation privilege is something that's prepared in contemplation of upcoming litigation, says Merritt.

“It doesn't necessarily have to be litigation that's already started but it might be litigation that you're anticipating could result.”

Solicitor-client privilege is with respect to communications with your lawyer — but not just any communication, it must involve legal advice, she says.

“I think a common misunderstanding is that ‘Oh, if I retain a lawyer to conduct this investigation, it's privileged.’ And it's not quite that simple, because it depends on the primary purpose for which you're retaining that lawyer, and whether they're actually providing legal advice or if they're just conducting a factual investigation, for example.”

The issue can be complicated because it’s very fact-specific and category-specific, says Merritt.

“If something’s privileged or not wouldn’t necessarily be a blanket drawn over the whole investigation,” she says.

“If the agreement with the investigator specifically says, ‘This report is being prepared for the purpose of being provided with legal advice and recommendations,’ for example, that's different than just ‘I've been retained to investigate a complaint and make findings.’”

And a particular jurisdiction, such as the privacy commissioner, might parse it out even more, looking at the investigation report itself, for example, to say the headings are fine to produce, says Merritt, “but the actual content of the recommendations are legal advice and, therefore, privileged.”

Challenges to establishing privilege

If an employee is terminated for cause, the employer has a reasonable prospect of litigation — but that's the easy part of the test to make out, says Deering.

“The hard part of the test for litigation privilege is to establish... that the dominant purpose of the investigation was to prepare for that litigation. So that's where that one always falls down.”

For example, if there’s a workplace fatality, the employer must conduct an investigation under occupational health and safety law, and presumably company policy, plus potential litigation, she says.

“Is the litigation the dominant purpose out of those three purposes? And there's been decisions where they say, ‘Well, it's not; I can't find that that's the dominant purpose.’ So there falls away your litigation privilege.”

As a result, people often are more comfortable with solicitor-client privilege or legal advice privilege because they just have to have a solicitor-client relationship that was confidential and the communications had to be further to that relationship, says Deering.

And if the lawyer does the investigation, it would have been privileged — as long as they gave legal advice, she says.

“That's sometimes where lawyers muck up their investigations. If you forget to give the legal advice, then it's just the lawyer doing an investigation, a fact-finding mission, and then it's not privileged.”

But in this Alberta case, they hired an external firm to do the interviews and conduct the investigation and, “basically, the court was saying, Okay, well, there's nothing special about these folks,’” says Deering.

For example, in a fraud case, a forensic accountant may be hired, and the court would understand the need for that kind of expert, she says.

“One takeaway is if you're going to build your privilege case, you've got to build a case for why these people are necessary, why they are that necessary ‘conduit’.”

And while workplace investigators are often better positioned to conduct those interviews than a lawyer — such as familiarity with trauma-informed investigations or specialized training with Indigenous people — that wasn't the evidence of this case, says Deering.

“The court kind of said, ‘These people are nothing special, a lawyer could have done it,’” she says. “And so solicitor-client privilege didn't carry the day. And I think, certainly the [employer] in this case, were rather surprised by that result. I don't think many people give too much careful thought to all of that. But, frankly, it makes sense on the established law; I think the reasoning of the court is good.”

However, if the employee had requested a copy of the report, he may have had a harder time, says Deering, “because I'm assuming there was legal advice in that report.”

More than one report helps privilege defence

Employers, of course, want to be able to rely on the investigation, as seen in this case when a person was terminated for cause because of allegations of sexual harassment.

“Obviously, some of that information is going to be sensitive, and detailed. So, you want to be really mindful of protecting it, but you also might want to rely on it for something like a court case, specifically, so you actually want to disclose it to the other side to say, ‘Here's why you were let go,’” says Merritt.

It can also make sense to do multiple investigations to get around the dominant purpose problem, says Deering. For example, you could have two people on the respectful workplace investigation team, and then two on the occupational health and safety team — and both should be prepared to have a producible report, so they should govern themselves accordingly.

But then a lawyer will do a separate investigation solely for the purposes of defending litigation, she says.

“If you set something like that up, it's looking really good in terms of protecting the privilege over that side of things.”

How to handle investigations that may not be privileged

If an employer wants an investigation or report to be privileged, it needs to think about that at the very outset, says Merritt.

“That's kind of an interesting takeaway from this is the judge really focused on the fact that this was in compliance with their respectful workplace policies, so the actual reason for doing the report was to comply with their own policies on it.”

While a workplace investigator would usually ask people to keep the discussions and facts confidential, they should also advise that they might have to share what they’re told with the respondent, for example — so the person has a chance to respond — and as otherwise required by law, she says.

“I think it is misleading to give people the idea that there's this blanket of complete confidentiality.”

Deering says she never tells a witness whether or not the information they share is privileged or not.

“I tell them it's confidential. The privilege belongs to the company, my client, who's conducting the investigation. So I always consider that privilege doesn't really concern the employee.”

Lawyers may have great powers, but they don’t have magical ones, and they can’t make everything privileged, she says.

“Sometimes, in a dismissal for cause, you probably are going to need to rely on the report. In which case, you need to think about ‘How am I going to conduct this investigation, recognizing that I'm probably going to have to disclose the report and maybe the investigation notes?’”

Another takeaway? Think about privilege right at the outset, and not just about how to protect it, says Deering.

“Let's think about how this might go if we can't protect it. And how important is it to protect it?”