Oliver Fenceroy v. Gelita USA, Inc., Tom Haire, and Jeff Tolsma
908 N.W.2d 235
| Iowa | 2018Background
- Plaintiff Oliver Fenceroy, an African-American former employee, filed an ICRC charge alleging racial harassment after leaving Gelita in 2013; Gelita retained counsel Ruth Horvatich to investigate and drafted an ICRC position statement relying on that investigation and ensuing discipline.
- Gelita later defended a civil suit by Fenceroy and pleaded the Faragher–Ellerth affirmative defense (reasonable prevention/correction + employee’s failure to use procedures); defendants produced witness statements from Horvatich’s 2013 investigation but withheld Horvatich’s notes and opposed her deposition.
- Plaintiff sought to depose Horvatich and obtain her investigative notes; defendants moved for a protective order claiming attorney-client privilege and work-product protection because the investigation was done in anticipation of litigation.
- The district court denied the protective order, finding the employer waived privilege and non-opinion work product by relying on the investigation to support its Faragher–Ellerth defense; the employer appealed interlocutorily.
- The Iowa Supreme Court affirmed: an employer that relies on an attorney-conducted pre-suit investigation to prove the reasonableness prong of Faragher–Ellerth impliedly waives attorney-client privilege and non-opinion work-product protection over that investigation, but opinion work product remains protected.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether asserting and relying on a Faragher–Ellerth defense waives attorney-client privilege over an attorney-conducted presuit investigation | Gelita’s reliance on Horvatich’s investigation put its content at issue, so privilege was waived and Horvatich may be deposed | Gelita says its defense rests solely on policies in place during employment and plaintiff’s failure to use them; the postemployment investigation is not necessary or "at issue" | Waiver: Court holds that when an employer relies on an attorney’s investigation to prove the reasonableness prong of Faragher–Ellerth, attorney-client privilege is impliedly waived (employer may retract waiver on clear record) |
| Whether work-product protection is waived for the same investigation | Plaintiff: non-opinion investigatory work product used to prove reasonableness must be produced | Defendant: investigation was in anticipation of litigation and thus protected work product | Waiver: Court holds non-opinion work product is waived if relied on to support the defense; opinion work product (mental impressions, legal theories) remains protected |
| Whether presence of a third party (union rep) during interviews waives privilege over the investigation | Plaintiff: interviews with union rep waived any privilege because communications occurred in third party’s presence | Defendant: third-party present was necessary and did not partake in internal deliberations; privilege not waived over investigative materials | Court declines broad rule that union presence waives all privilege; only communications made in the third party’s presence could be disclosed and those materials were already produced; issue unneeded here |
| Whether depositions of opposing trial counsel are permissible and under what standard | Plaintiff: necessary to probe substance of investigation because employer relied on it | Defendant: deposition of opposing counsel is disfavored; other discovery sources suffice; Shelton standard applies | Court affirms district court’s order permitting deposition given implied waiver; notes employer may retract waiver before district court—dissent argues Shelton three-part test should control and that deposition should be rare |
Key Cases Cited
- Faragher v. City of Boca Raton, 524 U.S. 775 (U.S. 1998) (establishes two-part employer affirmative defense to vicarious liability for supervisor harassment)
- Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (U.S. 1998) (companion decision setting forth employer defense elements)
- Harding v. Dana Transport, Inc., 914 F. Supp. 1084 (D.N.J. 1996) (holding employer waived privilege by relying on counsel’s investigation to defend discrimination claims)
- Squealer Feeds v. Pickering, 530 N.W.2d 678 (Iowa 1995) (party injecting a legal issue into a case may impliedly waive privilege over related communications)
- Exotica Botanicals, Inc. v. Terra Int'l, Inc., 612 N.W.2d 801 (Iowa 2000) (work-product protection and limits on subject-matter waiver; caution against overbroad waiver findings)
- Shelton v. Am. Motors Corp., 805 F.2d 1323 (8th Cir. 1986) (articulates three-factor test often applied before compelling deposition of opposing counsel)