NC Supreme Court: Employers Can’t Avoid Disclosure Obligations by Laundering Internal Investigations Through Outside Counsel

August 24, 2022   |   Sam McGee

Summary by Sam McGee, Legal Affairs Counsel

Buckley LLP v Series 1 of Oxford Insurance Company, NC, LLC

Opinion filed: Aug. 19, 2022
Attorney for the case: James P. Cooney, III
Amicus brief writers: Paul Smith, Laura Wetsch and Narendra Ghosh

North Carolina Supreme Court No. 219A21

The North Carolina Supreme Court issued an opinion last week addressing employers’ obligation to disclose communications with outside counsel related to investigations into alleged sexual harassment. The employer in question was required under its own policies to investigate any complaint of sexual harassment, and when a complaint was raised, chose to retain a law firm to conduct the investigation. It then sought to avoid disclosing any communications with counsel regarding the investigation by asserting attorney-client privilege. The trial court reviewed each of the communications at issue, and required disclosure of certain documents the “primary purpose” of which was not seeking or providing legal advice. The employer appealed to the North Carolina Supreme Court.

NCAJ filed an amicus brief, arguing that the trial court applied the correct standard, and that employers should not be permitted to avoid their disclosure obligations by laundering an internal business investigation through outside counsel. In a unanimous, per curiam decision, the Supreme Court affirmed several significant points with regard to the attorney-client privilege, all of which were argued in the NCAJ brief:

  1. The privilege applies identically to communications with in-house and outside counsel;
  2. Conducting sexual harassment/discrimination investigations is a regular part of doing business, and does not necessarily amount to seeking or providing legal advice; and
  3. Where communications mix legal and business advice, courts look to the “primary purpose” of the communication.

Consistent with the contentions of the NCAJ brief, the Supreme Court held that the trial court properly applied these legal principles. Accordingly, the decision of the trial court was affirmed.

About the Author

Sam McGee

Legal Affairs Counsel

Sam McGee

Legal Affairs Counsel

Sam McGee is a partner at Tin Fulton Walker & Owen, PLLC. He is a graduate of Yale Law School, Wake Forest University and Gerry Spence’s Trial Lawyers College.

Early in his career, Sam worked for both the United States Court of Appeals for the Eighth Circuit and the Supreme Court of North Carolina. During his 24 years of law practice, Sam has recovered over $100 million for his clients, including multiple seven figure verdicts, and recoveries of at least seven figures in North Carolina, Tennessee, Louisiana, Georgia and New Jersey. Sam has also handled numerous appeals, most notably being involved in three cases in two different states defeating binding arbitration for nursing home cases.  

For the majority of his career, Sam has been active in the North Carolina Advocates for Justice (NCAJ), serving two terms on the Board of Directors, two terms as a Section Chair, and multiple terms on the Legal Affairs Committee. He has also written two amicus briefs for NCAJ. Sam has served on the Amicus Committee of the American Association for Justice (AAJ), is on the Board of Directors of the Southern Trial Lawyers Association (STLA), and has taught CLEs and written published articles for all three of these organizations.