Preventing Discovery of Internal Investigation Materials: Protecting Oneself from One's Own Petard
| Date | 01 August 2000 |
| Publication year | 2000 |
| Pages | 1 |
| Citation | Vol. 69 No. 08 Pg. 1 |
69 J. Kan. Bar Assn. August, 1 (2000). PREVENTING DISCOVERY OF INTERNAL INVESTIGATION MATERIALS: PROTECTING ONESELF FROM ONE'S OWN PETARD
Vol. 69, August, 2000
Introduction
When accidents occur, the first reaction is to "get to the bottom of the problem" by conducting a thorough investigation. Regrettably, such good-faith investigations(fn2) often result in paper trails for external, hostile parties to follow if the matter results in unwelcome regulatory review or litigation.(fn3) Fortunately, Kansas law provides a way to "get to the bottom of the problem" without the corporate entity being "hoist[ed] with [its] own petard." When circumstances demand, entities can conduct internal investigations through legal counsel thereby shielding much of the results from discovery through attorney-client privilege and the work product doctrine.(fn4)
This article provides a road map for entities to follow when they desire to be pro-active in dealing with workplace disputes and regulatory compliance issues while shielding the results of such investigations from discovery in subsequent litigation or regulatory review. Specifically, Part I lists several state and federal legislative and regulatory provisions that necessitate utilizing evidentiary protections; Part II reviews attorney-client privilege and the work product doctrine, as applied in Kansas state and federal courts, with a brief discussion of self-critical analysis privilege; and Part III provides a framework for internal investigations to ensure that entities receive maximum protection from the available evidentiary protections. At its conclusion, it will be crystal clear that all entities not already utilizing these protections should do so, at least in a limited capacity, as a defense against their own good-faith efforts.
I. Federal and State laws that necessitate the use of available evidentiary protections
Many state and federal agencies are empowered to investigate the business activities of individuals and corporate entities. Indeed, the number of agencies with at least some form of investigatory power is almost mind-numbing.(fn5) Consequently, it is virtually impossible to discuss each and every regulatory agency of which entities must be aware within the limited scope of this article. This section is therefore limited to the agencies that place entities at greatest risk.
A. Kansas Investigatory Powers
1. Employment Discrimination Investigations
Perhaps the most powerful investigatory body in Kansas is the Kansas Human Rights Commission (KHRC). "Any commissioner or presiding officer may request the [KHRC] to initiate an investigation whenever possible violation of any statute, rules, orders or other authority administered by the Commission appears."(fn6) Subsequent to initiation of the investigation, "any Commissioner or the Executive Director may sign and issue a subpoena in the name of the [KHRC]."(fn7)
The power to demand production of documents, in and of itself, is not unreasonable. However, when combined with K.A.R. 21-42-5's expanded definition of "relevant," the cost of pro-active initiatives becomes clear:
The term "relevant to the investigation" shall include, but not be limited to, personnel, employment or membership records relating to the complainant and to all other employees, applicants or members holding or seeking positions similar to that held or sought by the complainant, and application forms or test papers completed by an unsuccessful applicant and by all other applicants or candidates for the same position or membership as that for which the complainant applied and was not accepted, and any records which are relevant to the scope of the investigation as defined in the notice or complaint.(fn8)
Hence, subpoenas issued by the KHRC tend to encroach upon many areas that could reveal additional violations wholly irrelevant to the matter at hand.
2. Health Care Investigations
The health care industry is uniquely susceptible to State regulatory review due to Kansas regulations specific to health care providers. For example, K.A.R. 28-52-1 requires all medical care facilities to establish written plans for risk management and patient care quality assessment.(fn9) The Kansas Department of Health and Environment (KDHE) retains the power to review such plans and make amendments as it deems appropriate.(fn10) The KDHE has similar authority in the regulation of adult care homes,(fn11) with broad power to inspect such facilities.(fn12) Moreover, adult care homes are subject to utilization reviews of each medicaid/medicare client by the Kansas Department of Social and Rehabilitation Services (SRS).(fn13)
3. Environmental Investigations
In the context of environmental issues, the KDHE has incorporated by reference federal regulations 40 C.F.R. §§ 280.50, 280.51, 280.52, and 280.53, which not only require entities to report acts that pollute the environment, but also empower the KDHE to investigate such acts.(fn14)
B. Federal Investigatory Powers
1. The Equal Employment Opportunity Commission
The Equal Employment Opportunity Commission (EEOC) is arguably the most powerful government agency when one considers the number of federal statues it has the responsibility of enforcing. The EEOC is empowered to enforce Title VII of the Civil Rights Act of 1964 (Title VII),(fn15) the Age Discrimination and Employment Act of 1967, as amended (ADEA),(fn16) The Equal Pay Act of 1963 (EPA),(fn17) the Americans With Disabilities Act of 1990 (ADA),(fn18) the Civil Rights Act of 1991,(fn19) and § 501 of the Rehabilitation Act of 1973, as amended.(fn20)
This wide-reaching authority results in a substantial number of charges being filed each year against employers. In fact, the EEOC manages between 75,000 and 80,000 charges per year, although the agency experienced an all-time high of 111,345 charges in the third quarter of the fiscal year 1995.(fn21) What is perhaps more disturbing for potential defendants is that the EEOC has successfully secured judgments in the tens to hundreds of millions of dollars against defendants. "In fiscal year 1996, the EEOC obtained over 50 million dollars in monetary benefits for discrimination victims. In fiscal year 1997, the amount rose to 111 million dollars in benefits, and represents the largest annual recovery in EEOC history. In fiscal year 1998, the EEOC's litigation program recovered nearly 90 million dollars for victims of discrimination."(fn22)
2. The Department of Labor
The U.S. Department of Labor (DOL) also has wide-reaching authority. The DOL, through itself and various departments, is responsible for enforcing the Fair Labor Standards Act of 1938, as amended (FLSA),(fn23) the Occupational Safety and Health Act,(fn24) the Employee Retirement Income Security Act (ERISA),(fn25) and the Family and Medical Leave Act (FMLA),(fn26) to name a few.(fn27)
In addition to the obvious breadth of the DOL's responsibilities and investigative authority, entities must be aware of the repercussions for failing to take into consideration the above-discussed statutes. For example, in the context of wage and hour violations pursuant to the FLSA:
On February 29, 1996, a federal jury in Seattle took a leap-year "leap" and awarded more than 13 million dollars to 5 former Seattle Super Sonic commissioned sales people who alleged they were fired in retaliation for complaining about overtime pay violations. The verdict included 12 million dollars in punitive damages, 7 million of which was leveled personally against two corporate officers.(fn28)
This award is even more disconcerting when one considers the fact that the employees claimed they were only owed about $15,000 (total) for unpaid overtime.(fn29)
3. The Immigration and Naturalization Service
The United States Department of Justice (DOJ) is responsible for enforcing the Immigration Reform and Control Act (IRCA) through its own investigatory efforts and its Immigration and Naturalization Service (INS) division.(fn30) IRCA "imposes penalties on employers for knowingly hiring or continuing to employ aliens who are not authorized to work in the United States."(fn31) Under IRCA, an entity must maintain records for each individual employee to prove that it made a good-faith effort to verify each employee's eligibility to work. The form that must be maintained is the "I-9", which must be accompanied with two other forms of identification.(fn32) Due to the changing nature of immigration law and federal policy, employers are often forced to audit their employment records to ensure continued compliance with the above discussed statute. Absent evidentiary protections, this audit process leaves a paper trail for the INS or DOJ investigators to follow which often results in fines in the tens to hundreds of thousands of dollars.(fn33)
4. The Environmental Protection Agency
The Environmental Protection Agency (EPA) is responsible for enforcing the Clean Air Act of 1990,(fn34) the Resource and Conservation and Recovery Act of 1976,(fn35) the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA),(fn36) the Emergency Planning and Community Right-To-Know Act,(fn37) the Pollution Prevention Act of...
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