California Court Rules Employer Waived Privilege by Relying on Workplace Investigation in Paknad Case[1]

Published
Score
11

Why it matters

The California Court of Appeal has ruled that an employer forfeits attorney-client privilege and work-product protection over internal investigation materials when it affirmatively relies on those investigations to defend against discrimination and harassment claims. In Paknad v. Superior Court, the court rejected the employer's attempt to redact factual findings, credibility assessments, and conclusions from an outside counsel investigation after the company cited the investigation's thoroughness and independence as evidence of reasonable preventive measures. The decision requires disclosure of the investigator's substantive work product when an employer puts the investigation's adequacy at issue in litigation.

The specific parties and underlying facts remain largely sealed in public filings. The ruling applies established privilege-waiver doctrine: an employer cannot selectively deploy an investigation as a litigation shield without opening it to discovery. The decision builds on longstanding employment law principles under Title VII, the ADA, and California equivalents, which require employers to investigate harassment complaints but warn against using those investigations defensively without accepting the disclosure consequences.

For California employers—and by extension those in jurisdictions with analogous doctrines—the ruling creates a sharp strategic calculus. Companies conducting internal investigations must now choose: either keep the investigation findings confidential and forgo citing them in defense, or produce them in full if litigation requires proving reasonable preventive action. The decision arrives amid rising employment litigation and heightened EEOC enforcement, making it a critical reminder that standard compliance practices carry hidden discovery risks. Counsel should advise clients to carefully consider whether touting investigative rigor in a defense is worth the inevitable disclosure of underlying materials.

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