Scott v. Chipotle Mexican Grill, Inc.
67 F. Supp. 3d 607
S.D.N.Y.2014Background
- Plaintiffs are current and former salaried "apprentices" at Chipotle who sued nationwide under the FLSA and several state laws alleging misclassification as exempt from overtime; collective action was conditionally certified and 580+ opt-ins joined.
- Chipotle pleaded affirmative defenses invoking 29 U.S.C. §§ 259 and 260 (reliance on administrative guidance and good-faith defense to liquidated damages) and disclaimed reliance on advice of counsel in its Answer.
- Discovery showed Chipotle consulted and received legal advice about the apprentice classification (deposition testimony of corporate rep David Gottlieb, privilege log entries, and privilege assertions in discovery responses).
- Plaintiffs sought attorney-client communications about the classification decision; Chipotle moved for a protective order to prevent disclosure on privilege grounds.
- The court analyzed at-issue waiver doctrine (Bilzerian/Erie line) and statutory good-faith requirements of §§ 259 and 260 and concluded Chipotle put privileged communications at issue by asserting those defenses while having consulted counsel.
- Court denied the protective order and ordered production of responsive privileged documents and specified discovery responses by a set date; California classification materials were deemed relevant to good-faith/willfulness issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Chipotle waived attorney-client privilege for communications about classifying apprentices by asserting §§ 259/260 defenses | Chipotle consulted counsel; advice is central to assessing good-faith reliance and willfulness, so communications are "at-issue" and must be produced | Chipotle disclaimed reliance on counsel and limited its defenses to administrative guidance; privilege should protect communications and a waiver would unduly chill counsel-seeking | Waiver: Court held Chipotle placed communications at issue by asserting good-faith defenses while having received legal advice; privilege waived and documents must be produced |
| Whether invoking only administrative-reliance language can avoid good-faith element of §§ 259/260 | Plaintiffs: statutory defenses require showing of good faith; artful pleading cannot eliminate that element when counsel was consulted | Chipotle: it can narrowly plead defenses to avoid putting state of mind at issue and avoid waiver | Court: Good faith is an explicit requirement of §§ 259/260; Chipotle cannot plead around it and thus cannot avoid at-issue waiver |
| Relevance of California classification (where apprentices were non-exempt) to plaintiffs' claims | California reclassification is relevant to Chipotle’s state of mind and to willfulness/good-faith defenses and may show notice of misclassification elsewhere | Chipotle: California apprentices are excluded from the suit and such discovery is irrelevant | Court: California decision is relevant and discoverable for assessing good faith/willfulness and may lead to admissible evidence |
| Whether policy concerns (chilling counsel use; broad exposure to liquidated damages) justify protecting communications | Plaintiffs: fairness requires access when defendant’s counsel’s advice could refute good-faith claims | Chipotle: waiver would force employers to choose between advice and defenses, expanding exposure to damages and chilling legal consultation | Court: Policy concerns insufficient to overcome statutory framework and precedent; defendants can avoid waiver by abandoning good-faith defenses or other procedural steps |
Key Cases Cited
- Upjohn Co. v. United States, 449 U.S. 383 (1981) (describes purpose and scope of attorney-client privilege)
- United States v. Bilzerian, 926 F.2d 1285 (2d Cir. 1991) (at-issue waiver applies when a party asserts good-faith defense that puts communications with counsel in issue)
- In re County of Erie, 473 F.3d 413 (2d Cir. 2007) (privilege elements and scope)
- In re County of Erie, 546 F.3d 222 (2d Cir. 2008) (clarifies at-issue waiver in good-faith/state-of-mind defenses)
- EEOC v. Home Ins. Co., 672 F.2d 252 (2d Cir. 1982) (§ 259 defense requires reliance, conformity, and good faith)
- Barfield v. New York City Health & Hospitals Corp., 537 F.3d 132 (2d Cir. 2008) (§ 260 good-faith standard for liquidated damages)
- Reich v. Southern New England Telecommunications Corp., 121 F.3d 58 (2d Cir. 1997) (clarifies limits of § 260 good-faith defense)