May a Defendant Avoid an Implied Privilege Waiver by Withdrawing an “Advice of Counsel” Defense?

April 4, 2018

Because implied waivers do not involve actual disclosure of privileged communications, litigants triggering an implied waiver can sometimes change their position before it is too late.

In Aboudara v. City of Santa Rosa, the FLSA defendant filed an amended answer raising “an affirmative defense of good faith” – “specifically alleg[ing] that it acted in good faith because, among other things, ‘Defendant consulted with legal counsel regarding its FLSA compliance.'”  Case No. 17-cv-01661-HSG (JSC), 2018 U.S. Dist. LEXIS 10033, at *2 (N.D. Cal. Jan. 22, 2018) (internal citation omitted).  However, defendant then prohibited its witness “from answering any questions as to advice she received,” and refused “to produce any documents reflecting such advice.”  Id.  Plaintiff moved to compel the discovery, but the court rejected the plaintiff’s motion.  The court noted that defendant “has offered to stipulate that it will not in any way rely on advice of counsel in support of its good faith defense and will move to amend its answer if need be.”  Id. at *3.  But the court closed its analysis with an obvious warning about what it called defendant’s “change of heart” — “of course, Defendant is now bound by its current representation and may not in any way rely on the fact that legal advice was sought.”  Id. at *2, *4.

Corporate defendants not appreciating the waiver implications of early pleadings normally have a chance to reconsider and avoid potentially disastrous implied waivers.