Fenceroy v. Gelita USA
February 27, 2018
Case Name: Fenceroy v. Gelita USAFiled: February 23, 2018 by Iowa Supreme Court (No. 16-0775)Subject matter: The Faragher-Ellerth defense and whether it constitutes a waiver of attorney-client privileged presuit investigation materials. The Court affirmed the lower court’s denial of a protective order which sought to prevent the deposition and disclosure of the investigating attorney. The case was remanded for further proceedings.This case includes discussion of the following:
The Faragher-Ellerth Defense to vicarious liability for workplace discrimination is applicable where the employer did not take any tangible employment action.“The two-part defense requires employers to show reasonable care was exercised to ΓÇÿprevent and correct promptly any . . . harassing behavior’ and to further show the claimant employee ΓÇÿunreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.’” (citing Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Indus., Inc., 524 U.S. 742 (1998)).“Generally, if an employee fails to notify the employer of wrongdoing, courts have found that such failure, coupled with adequate preventive policies, is sufficient to prevail in the defense.” (citing Faragher, 524 U.S. at 807–08).“[A]n employer does not impliedly waive an attorney-client privilege by using an attorney to investigate a complaint of workplace discrimination, but, rather, by subsequently relying on the investigation to prove a Faragher-Ellerth defense asserted in a lawsuit.”“We agree that an employer who relied on a presuit investigation to support a Faraher-Ellerth affirmative defense waives attorney-client privilege when the investigation is conducted by an attorney.”“When the reasonableness of the investigation into the allegation is relied upon as a defense, the contents of the investigation are placed into issue and become subject to disclosure.”A party may retract the waiver and reinstate the attorney-client privilege by a clear declaration that an investigation into a complaint will not be relied upon to help prove the Farahger-EllerthThe dissent (Justice Waterman, with Justices Mansfield and Zager joining) maintains that the district court abused its discretion by compelling the deposition of trial counsel, who was also the investigating counsel, and the production of her notes prepared in anticipation to litigation. The dissent states that (1) Gelita did not waive attorney-client privilege by briefly referencing the investigation in its summary judgment brief, (2) even if Gelita had waived the privilege, its subsequent actions were a clear retraction, and (3) Fenceroy was not entitled to depose Gelita’s counsel under Sheldon v. American Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986).More Information:Iowa Supreme Court: Fenceroy v. Gelita USA