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Unmasking the veil of privilege in workplace investigations

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There is a growing prevalence of workplace investigations in today’s legal landscape.  Conventionally, employers have conducted investigations for two primary reasons:

  • to minimize legal liability to employees who have experienced some form of injury or improper treatment in the workplace (e.g. injury, discrimination, harassment, etc.); and
  • to obtain information that may be relevant to a future course of action (e.g. employee discipline).

As part of their attempts to minimize legal liability and secure advice on a future course of action, employers often insist on maintaining privilege over the content and findings of their investigations.  As my colleague Christine Thomlinson highlighted in her recent blog, this is typically done by cloaking the investigation under the veils of “solicitor-client privilege” and/or “litigation privilege”.  In short, solicitor-client privilege attaches to confidential communications between a client and a legal advisor that are connected to seeking or giving legal advice, while litigation privilege attaches to documents created for the dominant purpose of contemplated litigation.

Given that investigations are frequently conducted for a number of complementary reasons, the boundaries of privilege are rarely black and white. These boundaries have been further blurred by the advent of statutory duties to investigate certain incidents in the workplace – for example, the duty to investigate incidents and complaints of workplace harassment under Ontario’s Bill 132.

Consider this – if an Ontario employer initiates an investigation following a serious incident of workplace harassment, is that investigation primarily conducted in anticipation of litigation, or is that investigation primarily conducted in order to comply with the statutory duty to investigate?  This tension is highlighted in a decision released by Alberta’s Court of Appeal earlier this month – Alberta v Suncor Inc., 2017 ABCA 221.

On April 20, 2014, an employee of Suncor Energy Inc. (“Suncor”) was fatally injured at a worksite in Alberta.  Suncor reported the fatality to the Ministry of Labour and launched an internal investigation into the incident.  Shortly thereafter, the Ministry of Labour issued demands for production of information collected during the investigation in accordance with the provincial Occupational Health and Safety Act (“OHSA“), which provided, inter alia, as follows:

  • if a serious injury or accident occurs at a work site, the employer shall “carry out an investigation into the circumstances surrounding [the] serious injury or accident” and “prepare a report outlining the circumstances of the serious injury or accident”; and
  • every person who has information relating to the accident shall, on the request of a Ministry of Labour officer, “provide to the officer any information respecting the accident that the officer requests”.

Suncor provided the Ministry of Labour with a report of its investigation, and produced materials that pre-dated or coincided with the incident.  However, Suncor asserted privilege over all other materials created or collected in the course of its internal investigation.

Her Majesty the Queen in Right of Alberta (“Alberta”) filed an application seeking an order that Suncor provide the refused materials.  At first instance, the chambers judge held that the dominant purpose of Suncor’s internal investigation was in contemplation of litigation, which had the effect of cloaking all material “created and/or collected” during the investigation under the veil of legal privilege.   Alberta appealed that determination.

The Court of Appeal held that the chambers judge erred in two primary respects.

First, the chambers judge erroneously found that, because the investigation itself was carried out in anticipation of litigation, the veil of privilege applied to all documents “created and/or collected” during the investigation.  The Court of Appeal noted that the proposed formulation would capture information otherwise created in the ordinary course of business merely because it was subsequently collected in the course of an investigation.

The Court of Appeal held that the privilege inquiry must focus on the purpose of creating the material – not the purpose for obtaining it – and each of the contested documents must be examined on its own:

Even if the dominant purpose of the internal investigation as a whole was in contemplation of litigation, this does not mean that every document “created and/or collected” during the investigation assumes the mantle of that overarching dominant purpose so as to be clothed with legal privilege… The inquiry requires examination “document by document” or group of like documents to determine the purpose behind its creation.

Suncor cannot, merely by having legal counsel declare that an investigation has commenced, throw a blanket over all materials “created and/or collected during the internal investigation” or “derived from” the internal investigation, and thereby extend solicitor-client privilege or litigation privilege over them.

Second, although the chambers judge correctly concluded that the provisions of the OHSA did not operate to automatically defeat claims for legal privilege, he failed to consider the complex interplay arising from Suncor’s statutory obligations under the OHSA:

However, given the breadth of the litigation privilege he conceived and the referee process he directed, the chambers judge has not yet turned his mind to the interplay between the claims of legal privilege and the statutory obligations upon Suncor under sections 18 and 19 of the OHSA. These include the obligation to carry out an investigation, prepare a report, and provide access to the workplace and employees for information respecting the accident for the OHS investigation.

The matter was ultimately directed to a referee, who is now tasked with determining the dominant purpose for the creation of each document.  In the circumstances, although the Court of Appeal has offered some general guidance on the interplay between claims for privilege and statutory duties to investigate, it remains to be seen how that interplay will be evaluated in practice.  It also remains to be seen how this decision will be applied in other jurisdictions that have similar statutory duties to investigate – for example, Ontario’s own OHSA regime.

Nevertheless, the case offers a number of key takeaways for employers:

  • Consider the Investigation’s Purpose: Employers should never assume that the mere presence of a lawyer and/or possible litigation will protect against otherwise mandatory disclosure of communications and information collected during investigations.  Investigations are typically carried out for multiple purposes, and (as seen above) courts will carefully scrutinize an employer’s attempts to cloak information created and/or collected during investigations under the veil of privilege.
  • Overestimating the Size of the Veil of Privilege: The Court of Appeal has issued a clear reminder that claims for privilege must be assessed on a “document by document” basis.  Employers would be ill-advised to assume that anything “created and/or collected” during an internal investigation will be privileged, even if that investigation is otherwise conducted in contemplation of litigation or for the purpose of securing legal advice.
  • Consult with Legal Counsel: Where there is an intention to claim privilege over the findings of an investigation, employers are encouraged to seek legal counsel before initiating the investigation, as there are steps that should be taken from the outset.  Such steps include: (i) setting out the privileged purpose of the investigation in the retainer letter; (ii) marking communications and reports as “privileged and confidential”; and (iii) instituting procedures to prevent the inadvertent disclosure of communications and information.

Titus Totan

About the Author: Toronto employment lawyer Titus Totan supports both employee and employer clients in all areas of employment law, including employment standards, contractual and implied obligations, terminations, workplace investigations and workplace human rights.