When are workplace investigation reports protected by solicitor-client privilege? When are workplace investigation reports protected by solicitor-client privilege?

Case summary

In Starrs v. Troczynski, 2024 BCSC 2267 (Starrs), the plaintiff sought a production order against his former employer, Heidelberg Materials Canada Limited (HMC), for a workplace investigation report (the Report). The investigation was initiated in response to the plaintiff’s alleged breaches of HMC’s drug and alcohol policy. HMC’s in-house counsel had directed a third party, Integrated Risk Investigations Security Solutions Corp. (the Investigator), to undertake the investigation and prepare the Report. HMC’s in-house counsel had then provided a copy of the Report to its external employment counsel in connection with seeking their legal advice about the possibility of terminating the plaintiff’s employment.

HMC opposed the production order on the basis that the Report was subject to solicitor-client privilege. HMC emphasized that:

• the Report was commissioned by its in-house counsel
• the Report was marked “Solicitor-Client Privileged”
• HMC provided a copy of the Report to its external employment counsel for the purpose of obtaining legal advice
• HMC received legal advice from its external employment counsel based, in part, on the contents of the Report, and
• HMC acted on the legal advice of its external employment counsel with respect to the termination of the plaintiff’s employment

The British Columbia Supreme Court noted that not all communications between a third party and a lawyer which assist in giving or receiving legal advice will be protected by solicitor-client privilege. The Court explained that such communications will only be protected by solicitor-client privilege if the third party’s function is essential to the maintenance or operation of the solicitor-client relationship, such as where the third party acts as a channel or conduit of information between the solicitor and client. On that basis, the Court held that the relevant question in Starrs was whether the Investigator, as a third party, had prepared the Report “for the purpose of seeking or providing legal advice, opinion, or analysis” (para. 22).

The Court concluded that because the Investigator had only gathered information, compiled it in the Report, and then provided the Report to HMC’s in-house counsel, the Investigator had not acted as a channel or conduit of information between HMC and its external counsel, and the Investigator’s function had not been essential to the maintenance or operation of the solicitor-client relationship between HMC and its external counsel. Accordingly, the Court found that solicitor-client privilege did not attach to the Report.

Takeaways

Starrs reinforces that solicitor-client privilege will not automatically attach to a workplace investigation report simply because it is prepared at the direction of counsel, or marked “privileged”, nor even if it is prepared and used to inform the legal advice ultimately relied on by the employer. Indeed, even where the evidence demonstrates, as it did in Starrs, that the employer commissioned the report specifically to be used by the employer’s counsel for the provision of legal advice to the employer, and where the employer took active steps to ensure the report would be privileged, the same is not determinative. Starrs is therefore a cautionary tale for employers: workplace investigation reports may, regardless of the employer’s clear intentions and expectations to the contrary, eventually see the light of day, and as such, employers should always ensure that these reports are prepared with the utmost care.

Another important takeaway here is that whether a workplace investigation report is protected by solicitor-client privilege will depend on the context in which, and the specific purpose for which, the report was prepared. Further, if the report is prepared by a third party (lawyer or not), a crucial distinction will be whether the employer engaged the third party to perform an investigative, information-gathering, fact-finding function, and/or to seek or provide legal advice, opinion, or analysis.

Finally, Starrs illustrates the tension between an employer’s desire to have solicitor-client privilege attach to a workplace investigation, and the desire to maintain fairness and impartiality (for instance, to fulfill the employer’s statutory obligations under applicable human rights or occupational health and safety legislation). Indeed, a recent arbitration award in Ontario, Toronto Metropolitan Faculty Association v. Toronto Metropolitan University, 2024 CanLII 109523, and the leading authorities cited therein, make clear that if an employer’s counsel conducts a workplace investigation on behalf of the employer, then while this may be sufficient to cloak the investigation and any resultant investigation report in solicitor-client privilege, this will also create a reasonable apprehension of bias and call into question the fairness and impartiality of the entire investigation. This dilemma arises because the employer’s counsel, by definition, owes duties of loyalty and candour to the employer as their client, and thus, will have obligations as a solicitor to their client that are antithetical to the fulfillment of the role of a fair and impartial investigator.

Workplace investigations are increasingly important but difficult to navigate, and they present a number of nuanced issues for employers. Osler’s Employment and Labour Group has extensive experience advising clients on complex and high-stakes workplace investigation matters. For individualized guidance on how best to structure a workplace investigation in light of your particular legal obligations, business objectives, and other priorities, please reach out to a member of our Employment and Labour Group.