court rules in favor of privilege in investigation report that led to employee’s dismissal | McGuireWoods LLP


Courts are often faced with a common scenario: an in-house attorney investigates an employee’s alleged misconduct and prepares a report that the company relies on to terminate the employee. Do these reports deserve privileged protection, and what if the employer produces a redacted version of such a report to justify the dismissal?

In Maiurano vs. Cantor Fitzgerald Securities, No. 19 Civ. 10042 (KPF), 2021 US Dist. LEXIS 207746 (SDNY 27 Oct 2021), Deputy General Counsel for Cantor Fitzgerald investigated alleged irregularities in an employee’s financial dealings. Cantor Fitzgerald fired the employee, who then sued the company. Cantor Fitzgerald produced his attorney’s investigation report, but “redacted the entire sections entitled ‘Conclusion’ and ‘Observations and Recommendations'”. Identifier. at 2 o’clock. Unsurprisingly, Plaintiff argued that Cantor Fitzgerald waived his privilege by “producing the redacted version of the memorandum and relying on it as the basis for Plaintiff’s termination.” Identifier. at 3. The court initially said it “had little difficulty in concluding” that the redacted portions of the memorandum deserved privileged protection. Identifier. at 5. More importantly, the court then accepted Cantor Fitzgerald’s argument “that its decision to terminate plaintiff was” based, in part only, on the factual findings of the [Memorandum]all of which have been disclosed to the applicant. “” Identifier. to *7 (modifying the original). The court ultimately rejected plaintiff’s waiver argument, pointing out that Cantor Fitzgerald “further states that he will not rely” on the privileged portions of the [Memorandum] as a basis for ending [Plaintiff’s] employment, which will be presented by objective evidence of [Plaintiff’s] misconduct.'” Identifier. (changes in the original).

This helpful case provides a useful roadmap for companies in the same situation.


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