By Tori Harrison, of Waller Lansden
In September 2022, The DC District Court made a series of notable discovery rulings concerning the privileged nature of internal investigation materials related to a Title VII complaint. The underlying lawsuit concerns a George Washington University employee’s internal complaint—and subsequent EEOC charge and lawsuit—alleging gender discrimination and unequal pay. Notably, the parties’ prolonged discovery battle presented a unique issue—whether pleading a defense based on the defendant’s good faith compliance with Title VII waives the attorney-client and work-product privileges to the university’s internal investigation materials (which evince good faith compliance).
From mid-2014 through 2016, Plaintiff Sara Williams worked as an Executive Assistant to George Washington University Athletic Director, Patrick Nero. In this position, Ms. Williams earned an annual salary of $40,000.00 per year. Ms. Williams’s discrimination lawsuit centers on her allegation that Mr. Nero began showing preferential treatment towards a male employee, Michael Aresco, in 2015. One aspect of this “preferential treatment” included Mr. Nero’s promotion of Mr. Aresco to “Special Assistant” in the Athletics Department, which entailed a job description that was nearly identical to Ms. Williams’s but at a salary of over $77,000.00 per year.
In March 2016, Ms. Williams filed an internal grievance with the University’s Equal Employment Opportunity Office, complaining of gender discrimination and unequal pay. The University responded to Ms. Williams’s complaint by conducting an internal investigation. This investigation was subsequently turned over to an outside law firm, Saul Ewing Arnstein & Lehr LLP. While this investigation was ongoing, Ms. Williams filed a Charge of Discrimination with the EEOC, which concluded with the Commission finding reasonable cause to believe the University violated Title VII and the Equal Pay Act. After conciliation failed, the Commission filed suit in the District Court for Washington D.C.
The University answered the Commission’s lawsuit (on behalf of Ms. Williams) by asserting, among other things, the “Kolstad defense” to cut off any punitive damages. Under this doctrine, “an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where these decisions are contrary to the employer’s ‘good-faith efforts to comply with Title VII.’” Kolstad v. Am. Dental Ass’n, 527 U.S. 526, 528 (1999).
A lengthy discovery battle ensued between the parties that largely centered on the privileged nature of the University’s investigation materials and the sufficiency of the University’s privilege log. The District Court was not persuaded by the Commission’s argument that the investigation materials were not privileged because the internal investigation “was not conducted by attorneys” or “for the purpose of securing legal advice,” but rather was “conducted in the regular business of the [Equal Employment Opportunity] Office.” As a result, the Court denied the Commission’s Motion to Compel the withheld documents on these grounds.
The more unique issue presented by these discovery disputes was the Commission’s argument that the University waived all privilege to the investigation materials by pleading the Kolstad defense because showing good faith compliance with Title VII required the University to prove that the investigation was sufficient. Ultimately, the District Court found that no waiver occurred because the University did not intend to rely on the investigation materials to show its good faith efforts to comply with the statute. Instead, the University disclosed that it would rely on “documents and testimony from the individuals involved in hiring the Special Assistant to demonstrate that the hiring was conducted in a fair, nondiscriminatory manner” and “documents and testimony from persons in its Compensation Department to show that the University’s decisions with respect to [Williams’s] and Aresco’s pay also were made in good faith and in accordance with the University’s non-discrimination policy” to support its defense of good faith compliance. Accordingly, the Court also denied the Commission’s Motion to Compel on this ground.
However, the Court discussed—and left open the possibility—that it would have found that the University waived all privilege to the investigation materials absent a clear showing that the University did not intend to rely on the materials to support its Kolstad defense. Therefore, it is prudent to outline and disclose all non-privileged evidence that supports a Kolstad-type defense to prevent any potential privilege waiver.
