Privilege Issues In High-Profile Corporate Sexual Harassment Case: Part I

January 15, 2020

The Southern District of New York (Magistrate Judge Gorenstein) issued an extensive privilege decision with several favorable analyses in a high-profile corporate sexual harassment case. In Parneros v. Barnes & Noble, Inc., 332 F.R.D. 482 (S.D.N.Y. 2019), Barnes & Noble’s General Counsel Bradley Feuer investigated alleged sexual harassment misconduct by then CEO Demos Parneros. Feuer hired Paul Weiss to represent the company in investigating the allegations, and also enlisted the company’s Senior VP of Corporate Communications and Public Affairs Mary Ellen Keating to assist with the investigation. The company eventually fired Parneros and refused to pay him severance. Parneros sued the company for defamation and breach of contract. The Southern District of New York dealt with several privilege issues implicated by Parneros’s discovery requests.

First, the court found that General Counsel Feuer’s investigation was primarily motivated by his need for legal advice. The court first pointed to the potentially serious misconduct by “the company’s top executive” as “provid[ing] some circumstantial evidence” supporting the primary purpose assertion. Id. at 494. The court also emphasized that Feuer’s retention of Paul Weiss as “litigation counsel the same day that he learned of the allegations” bolstered the privilege assertion – recognizing courts’ frequent conclusion that “the retention of outside litigation counsel to advise an internal investigation [is] an important factor in determining whether an internal investigation is being conducted for the purpose of obtaining legal advice for the company.” Id. Second, although acknowledging that Senior VP Keating “does not appear to have any particular expertise that would enable her to conduct the investigation in a more skilled manner than [the Company’s General Counsel] himself,” the court explained that there was no case law “suggesting that a corporate employee who conducts an investigation for an attorney must have a particular skill to qualify as the attorney’s agent.” Id. Thus, Senior VP Keating’s involvement was inside privilege protection. In-house lawyers often “deputize” employees to assist in such investigations – and Judge Gorestein’s analysis will be very helpful in asserting privilege for their involvement.

The next three Privilege Points will describe other favorable language from this significant case.