In C.S. v. Brick Recycling Company, DOCKET NO. A-0628-25 (N.J. Super. Ct. App. Div. June 1, 2026), the New Jersey Appellate Division clarified the scope of privilege waiver when an employer relies on an attorney-led workplace investigation as an affirmative defense. In this matter, the plaintiff claimed he was subjected to years of alleged sexual harassment by M.R., prompting the employer (Brick Recycling Company) to retain Attorney Horn to conduct an investigation and prepare a report.
After the plaintiff’s resignation and the filing of the subsequent lawsuit, the defense produced the final report but withheld eight items identified on its privilege log from the investigator’s broader file. The privilege log included the following materials:
(1) Pre-report attorney correspondence with management;
(2) A draft agreement prepared for the company and the accused co-worker;
(3) An incomplete early draft of the investigation report;
(4) The attorney’s personal interview and meeting notes; and
(5) The initial retainer agreement and related correspondence.
The trial court ordered a blanket production of these items, concluding that they were not privileged.
On appeal, the Appellate Division addressed the “dual role” an attorney may play “as both investigator and legal adviser to the company,” noting that, although “a fine line” exists when an attorney performs non-legal duties, a close temporal nexus may establish that the attorney was simultaneously providing protected legal advice. Although invoking an investigation as an affirmative defense under the standards set forth in Burlington Indus. v. Ellerth, 524 U.S. 742 (1998), Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Aguas v. State, 220 N.J. 494 (2015) standards call for waiver analysis, it does not grant unfettered access to the entire investigative file. Instead, when conducting an in-camera review, the trial court must: consider each withheld document, page-by-page, and (depending on the contents), line-by-line, to assess whether the material appears to be within the scope of the attorney-client or work-product privileges and, if so, whether that material is sufficiently (i.e., not tenuously) related to an employer’s affirmative defense to be disclosable.
The Appellate Division further explained that even where an employer waives privilege by relying on the undertaking and outcome of an investigation as an affirmative defense, that waiver is not without limitation. See Payton v. New Jersey Tpk. Auth., 148 N.J. 524 (1997) (the N.J. Supreme Court’s seminal opinion relating to the applicability of privileges in connection with workplace investigations). Certain materials may be so “tenuously related” to the affirmative defense that they remain protected from disclosure during discovery. Although Payton did not define “tenuously related,” the Court presumed that “related” was intended to be broadly construed consistent with civil discovery principles, while “tenuously” appears “to exclude documents or portions of documents that are too remote or attenuated to the affirmative defense to warrant their disclosure.”
Accordingly, the Appellate Division vacated the blanket disclosure order and remanded the matter for a “renewed and more fulsome in-camera review of the disputed eight documents” with explicit instructions. The panel also “preliminarily question[ed] whether Horn’s draft report should be disclosed to opposing counsel,” drawing an analogy to expert witness rules and observing that “at the time of trial, a litigant relies on the finalized version of the report to support a claim or an affirmative defense, not the draft.” Conversely, the court rejected categorical protection of “Horn’s notes of her meeting and telephone call with the company president,” instead directing a “closer line-by-line scrutiny by the trial court – potentially redacting passages that consist of legal advice and those non-advisory passages that mention facts that may be relevant to the case.” Finally, the court mandated the trial judge to issue written statements of reasons and required the plaintiff to submit a written proffer within twenty days demonstrating how any additional documents beyond the final investigation report could assist his case, given that he resigned before the investigation was completed.
Takeaways
This decision is significant in several respects. First, it instructs trial judges not to issue blanket disclosure orders without conducting an exhaustive, line-by-line review of disputed materials. Second, it reassures external workplace investigators that they may provide confidential legal guidance to management without automatically forfeiting privilege protections as such are not subject to automatic disclosure in discovery. Finally, it establishes that, although an employer may rely on its investigation and its prompt remedial action as a sword under Aguas, it may still preserve attorney-client privilege and work-product doctrine protection with respect to its internal work product and materials that are not sufficiently related to the asserted affirmative defense.